Sales of new U.S. single-family homes fell to an eight-month low in June and data for the prior month was revised sharply down, the latest indications that the housing market was slowing down.
The Commerce Department said on Wednesday new home sales dropped 5.3 percent to a seasonally adjusted annual rate of 631,000 units last month, the lowest level since October 2017. May's sales pace was revised down to 666,000 units from the previously reported 689,000 units.
Economists polled by Reuters had forecast new home sales, which account for about 10 percent of housing market sales, falling 2.8 percent to a pace of 670,000 units in June.
New home sales are drawn from permits and tend to be volatile on a month-to-month basis. They increased 2.4 percent from a year ago. Housing market data has weakened in recent months, with homebuilding falling to a nine-month low in June and home resales declining for a third straight month. Building permits also dropped to a nine-month low in June.
The sector has been plagued by rising building material costs and shortages of land and labor, which have put a squeeze on the supply of houses available for sale and kept house prices elevated.
Though the moderation in housing is largely driven by supply constraints, there are concerns that persistent weakness will eventually spill over to the broader economy. The housing market has underperformed the economy so far this year.