New home sales unexpectedly plunged 6.8% to 482,000 annualized units, far below any Bloomberg Consensus Estimate. 

 Volatility is common for new home sales and there's plenty of it the June report where the headline plunged 6.8 percent to a far lower-than-expected annual rate of 482,000 and where revisions erased 40,000 from the prior two months.

But there is some good news in the report and that's a surge in supply of new homes on the market, up 3.4 percent in the month to 215,000. Greater supply points to greater sales ahead. On a sales basis, supply is at 5.4 months vs 4.8 and 4.7 in June and May.

Prices look soft in the report, at a median $281,800 which is up 0.5 percent in the month but down 1.8 percent year-on-year. The latter reading points to deep discounting compared to the year-on-year sales gain of 18.1 percent.

Regional data show big drops in the West and the Midwest in the month and a smaller drop in the South. But the Northeast is showing life with a second straight solid gain. Year-on-year, the South and Northeast lead with respective sales gains of 23.7 and 23.1 percent with the West and Midwest lagging at 10.9 and 5.7 percent.

Key Numbers

Seven Month Low

Reuters reports New home Sales at Seven-Month Low. 

 New U.S. single-family home sales fell in June to their lowest level in seven months and May's sales were revised sharply lower, in what appeared to be a minor setback for the housing market recovery.

New home sales dropped 6.8 percent to a seasonally adjusted annual rate of 482,000 units, the lowest level since last November, the Commerce Department said. May's sales pace was revised down to 517,000 units from the previously reported 546,000 units.

“You never want to see the data regress, but we remain optimistic that we're still on a long-term upward trajectory,” said Tom Wind, vice president of home lending at EverBank in Jacksonville, Florida.

Despite two straight months of declines in new home sales, the overall housing market recovery remains intact.