Sales of new single-family homes in the United States are growing in June, but revisions to three-month forecasts signal that the sector is showing some weakness. The sales of new homes increased by 0.8% to a seasonally adjusted annual rate of 610,000 units in June. The economists predicted 1.4% growth. On an annual basis, the increase in sales was 9.1%.
Demand for housing is driven by a stable labor market that is close to full employment.
However, construction companies find it difficult to keep pace due to rising timber prices and labor shortages and building plots.
A separate report from the Association of Banks providing mortgage loans showed that mortgage loan applications dropped 2% last week to its lowest level in May. On an annual basis, however, there was an increase of 8%.
In July, attitudes among builders declined to an eight-month low and housing supply is unlikely to improve. A Monday report has shown that sales of existing homes have fallen by 1.8% in June, and probably this trend will remain.