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New home sales sink
Sales of one-family houses fell 6.6% in June, well below
economists' expectations.
NEW YORK (CNNMoney.com) -- The pace of new home sales was weaker than expected in June, according to the government's latest look at the battered real estate and home building market.
New homes sold at an annual pace of 834,000 in the month, down 6.6 percent from the revised 893,000 rate in May. Economists surveyed by Briefing.com had forecast sales would slow to a 900,000 annual sales rate in June.
The median price of a new home fell to $237,900, down 2.2 percent from $243,200 a year earlier. A glut of new homes on the market have pushed down prices and the government figures may not fully reflect the softness in new home prices, as roughly three-quarters of builders surveyed by their trade group say they are offering incentives such as covering closing costs or offering home features for free in order to support sales.
The sales of new homes are recorded at the time a sales contract is signed, so the sales pace may also be a bit overstated due to a rise in cancelled orders being reported by many builders.
The report follows a reading from the National Association of Realtors on Wednesday that showed the pace of existing home sales falling to their lowest level since November 2002.
While new home sales make up only a fraction of the overall real estate market, Thursday's report is closely watched as a more forward-looking reading than existing home sales, which are recorded at the time of closing, typically a month or two after a sales contract is signed.
The downturn in housing is battering results of leading home builders. Thursday morning D.R. Horton (Charts, Fortune 500), the nation's No. 2 home builder by revenue, reported a bigger than expected loss as it took $1.3 billion charges to recognize the lower value of its inventory.
Beazer Homes (Charts, Fortune 500), the No. 8 builder, also reported a loss, Thursday, and after the market close Wednesday, No. 3 builder Pulte Homes (Charts, Fortune 500) and No. 9 Ryland Group (Charts, Fortune 500) also reported losses, although some of the losses were less than forecast.
Late last month Lennar (Charts, Fortune 500), the nation's largest home builder by revenue, reported an unexpected loss in the most recent quarter, as did KB Home (Charts, Fortune 500), the nations' No. 5 builder 