Sales of new homes rose slightly in June, hitting their highest level in three months, as demand for housing remained stiff, according to government data released Wednesday.
But prices retreated from an all-time high and supplies rose, suggesting new construction could be offering some relief to what has been an exceedingly tight market, according to the U.S. Commerce Department report.
Sales of new homes rose 0.8 percent for the month to an annual rate of 610,000, seasonally adjusted, marking the second straight increase and matching analyst expectations.
That put home sales last month 9.1 percent higher than June of last year.
The median price retreated from May's all-time record, falling 4.2 percent to $310,800. The sales pace put the supply of available homes at 5.4 months, up slight from 5.3 months in May.
The stock of homes for sale rose to its highest level in eight years at an estimated 272,000, the report said.
Sales jumped in the western and mid-western United States, with sales of single-family homes in those regions rising by 10 percent and 12.5 percent, respectively. But activity was flat in the Northeast and fell more than six percent in the South.
In contrast to this reoprt, industry numbers released this week showed sales of existing homes fell last month, and realtors blamed a shortage of available homes and the tight market, which is pushing prices higher.
Seven years of uninterrupted job creation and steady economic recovery, with a new generation of millennials ready to enter the housing market, has created strong demand, potentially pricing some would-be home owners out of the market.
In addition, analysts say a tight labor market, local regulations and other barriers have held down construction, making the shortage more acute.