Sales of new homes plunge 6.8% in June

Sales of new homes dropped 6.8% from May to June, due largely to sliding sales in the West.

New single-family homes were sold at a seasonally adjusted annual rate of 482,000 in the U.S. in June, the Census Bureau said Friday. The decline surprised economists, who predicted a 0.9% increase to 550,000 in an Econoday survey.

The price of new houses also dropped to a median $281,800., down from May's median of $282,800.. The survey also showed that May's home sales were revised significantly downward, to 517,000, from 546,000.

The results were driven largely  by a 17% drop off in sales in the western U.S. for the month. The Midwestern and Southern states also saw numbers slide, 11% and 4% respectively, while the Northeast continued to see sales surge 28%..

New houses are just a fraction of monthly home sales. Monthly new-home sales data are volatile and likely to be revised, due to seasonal swings and small sample sizes, economists say.

Existing homes, a larger chunk of total home sales, fared better in June. They sold at the fastest pace in eight years last month and the median sales price reached an all-time record high, the National Association of Realtors said Wednesday.

Supplies of both new and existing homes are tight. There here is currently a 4.5 month supply of new homes and a 5 month supply of existing homes in the U.S., the agencies said.  A six-month supply is generally considered balanced.