New home sales tumble but upward trend intact
By Lucia Mutikani
WASHINGTON (Reuters) - New home sales recorded their biggest drop in more than a year in June and prices resumed their downward trend, dealing a setback for the budding housing market recovery.
Single-family home sales tumbled 8.4 percent to a seasonally adjusted 350,000-unit annual rate, the lowest pace in five months, the Commerce Department said on Wednesday.
The percentage decline was the largest since February 2011 and much of the drop in sales reflected a record 60 percent plunge in the Northeast, which had enjoyed hefty gains since December last year.
"Housing will continue to recover gradually throughout the year but fundamentals are not supportive of a fully fledged housing market recovery," said Yelena Shulyatyeva, an economist at BNP Paribas in New York.
The drop in new home sales last month came on the heels of a decline in home resales during the same period.
Housing had appeared to be bucking the broad weakness in the economy, marked by a sharp slowdown in job growth and a cooling in manufacturing against the backdrop of fears of tighter U.S. fiscal policy in early 2013 and a lingering debt crisis in Europe.
While sales of both new and previously owned homes fell last month, other parts of the housing markets exhibited strength.
New home construction in June hit its highest since October 2008 and confidence among home builders this month touched its best level in more than five years, reports showed last week. Continued...