• June new home sales rose 3.5 percent from May to 592,000 units (SAAR), according to the Census Bureau.
• Inventory of new homes for sale continued to gradually rise, growing 1.2 percent from May.
• The median price of new homes sold increased 7.4 percent in May to $309,900, recovering about two-thirds of the decline reported in May.

June new home sales rose 3.5 percent from May to 592,000 units at a seasonally adjusted annual rate (SAAR), their highest level since February 2008. Over the year, new home sales are up 25.4 percent (figure 1).

In each of the past eight months, new home sales have met or exceeded expectations. Since 2009 and throughout much of the housing recovery, existing home sales have gradually climbed upward while new home sales have held stubbornly low. But in the first half of 2016, the tide began to turn on this trend – new home sales have risen amid increased builder activity, at the same time as tight inventory of existing homes has held back existing home sales.

The inventory of new homes for sale continues to grow, although the deficit relative to pre-crisis levels remains very large. There were 244,000 (SAAR) new homes on the market in June, up 1.2 percent from May and 13 percent higher than the number of new homes on the market a year earlier. However, it remains below its long-term average of 324,000 new homes (SAAR) on the market in any given month between 1985 and 2000.

The median price of new homes sold in June rebounded 7.4 percent from May, to $309,900, after declining 10 percent in May from April. Over the year, the median price of new homes sold is up 6 percent. After increasing at a double-digit pace in late 2012 and 2013, the pace of growth of the median price of new homes sold has moderated over the past year.