New U.S. single-family home sales increased in June as purchases in the West surged to a near 10-year high, but downward revisions to the sales pace for the prior three months pointed to a housing market that was treading water.
The housing market is being constrained by a dire shortage of properties, which is keeping home prices elevated and sidelining first-time buyers.
The Commerce Department said on Wednesday new home sales rose 0.8 percent to a seasonally adjusted annual rate of 610,000 units last month. The sales pace for March, April and May was revised lower.
Economists polled by Reuters had forecast new home sales, which account for 10 percent of overall home sales, increasing 1.4 percent to a pace of 615,000 units last month. New home sales increased 9.1 percent on a year-on-year basis.
They remain less than half of what they were at the peak of the housing market bubble in 2005. Demand for housing is being driven by a strong labor market, which is near full employment.
Builders are, however, struggling to keep up amid rising lumber costs and shortages of labor and land. Housing starts are running at a 1.22 million-unit pace. That is below their historic average of 1.5 million units, a rate realtors say would eliminate the housing shortage.