Sales of new single-family homes are down 0.6 percent in June to 617,000 after a negligible upward revision to 621,000 in May. Sales are down 7.4 percent from 666,000 in the year-ago month. The June reading is well below the consensus of 640,000 in the Econoday survey of forecasters. While sales were up 0.3 percent in the South and up 1.4 percent in the West, sales declined 7.7 percent in the Northeast and 6.9 percent in the Midwest.

The overall dip in the pace of purchases for new single-family homes is probably due in large part to current prices and mortgage interest rates topping 7 percent in May and June. As of mid-July, mortgage rates are consistently and sufficiently below 7 percent. This may spark some home-buying in July, although the intense hot weather could deter buyer traffic.

The supply of homes available for sale is at 9.3 months' worth in June, up from 9.1 months in May and the highest since 9.7 in December 2022. The median price of a new single-family home is up 2.5 percent to $417,300 in June after $407,100 in May, but essentially unchanged from $417,600 a year ago. Some of the stability in prices compared June 2023 is likely due to sales of smaller homes as builders responded to demand for entry-level units in the absence of existing inventory.

Some homebuyers may be shopping around for price cuts or other incentives before committing to purchasing new construction, and feel less urgency in their choice now that the supply is more abundant in both existing and new home markets. The share of homes sold that are not yet started is unchanged at 12 percent in June from May. Homes under construction accounted for 40 percent of all sales in June, up from 38 percent in May. Completed homes are 48 percent of all homes sold in June.

New home sales have been especially volatile in recent months including revisions. After May's depressed 619,000 annual rate that followed April's strong 698,000, forecasters see sales in June improving to 640,000.

New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances.

This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as new home sales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio. Each time the construction of a new home begins, it translates to more construction jobs, and income which will be pumped back into the economy. Once the home is sold, it generates revenues for the home builder and the realtor. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items new home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, new home sales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the new home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.