Sales of new homes dropped in June as tariffs, trade wars weighed

Consumers are concerned about trade wars and tariffs and that has impacted new home sales according to the National Home Builders Association.

It was reacting to new figures from the HUD and Commerce Department which show a 5.3% decline in June from a downwardly-revised May reading, to a seasonally adjusted annual rate of 631,000 units.

“Uncertainty caused by tariffs and the talk of trade wars are making home buyers more cautious, and builders are taking note of this situation,” said Randy Noel, chairman of the National Association of Home Builders (NAHB). “Not only are consumers and builders concerned about the current lumber tariffs, but also the next round of proposed tariffs on a number of goods and services.”

Despite the decrease in new home sales, which marked the lowest annualized sales pace since last October, they were still 6.9% year-to-date compared to 2017.

Regionally, new home sales rose 36.8% in the Northeast. Sales fell 13.4% in the Midwest, 7.7% in the South and 5.2% in the West.

The inventory of new homes for sale was 301,000 in June, which is a 5.7-month supply at the current sales pace. The median sales price was $302,100.