New Home Sales edge higher in June

Wells Fargo Research Team Wells Fargo

Summary

Sales treading water as inventories climb

New home sales rose a modest 0.6% during June. The slight gain, which follows a sharp contraction in May, reflects weak buyer demand resulting from challenging affordability conditions and heightened economic uncertainty.

As shown in the below chart, new home sales are holding up relatively well given the elevated stance of mortgage rates. That said, new sales continues to run below new single-family production, leaving a high inventory-to-sales ratio. The widening gap implies further declines for residential construction in the near-term.

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Wells Fargo Research Team

Wells Fargo

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