New home sales tumble, but upward trend intact

English: Mobile home sales business in London Road (Photo credit: Wikipedia)

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 rate in five months, the Commerce Department said on Wednesday. The percent decline was the largest since February 2011 and much of the drop in sales last month 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.... Continue to read.

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