National Trends ~ New-home sales faltering

WASHINGTON - Sales of new homes fell in June for the first time in four months, and the government also lowered figures for May, providing further evidence the high-flying housing market is losing altitude.

The Commerce Department reported Thursday that new-home sales dropped by 3 percent last month to a seasonally adjusted annual sales pace of 1.131 million units. It was the first decline since an 11.5 percent drop in February.

The government also marked down sales activity in May to a pace of 1.166 million units, substantially below its initial estimate of 1.234 million units.

• Analysts pointed to the drop in sales last month and the downward revision for May as fresh evidence that housing was slowing considerably from the impact of higher mortgage rates.

• Analysts said the drop in new-home sales was consistent with the slowdown shown this week in sales of existing homes, which fell for the eighth time in the past 10 months.

“The housing market peaked a year ago and has been slowly deflating ever since,” said Mark Zandi, chief economist at Moody’s Economy.com. “We can expect another year of lower sales with price declines in some parts of the country.”

Source: Martin Crutsinger, The Associated Press