US new home sales rose slightly in June as costs weighed on buyers

New home sales in the United States rose slightly in June, but remained below their level a year earlier as high borrowing costs and inflation pressure continued to affect households.

The Commerce Department said sales increased 1.6 percent from May to a seasonally adjusted annual rate of 628,000. Analysts had expected a rate of 606,000, based on estimates published by MarketWatch. The June rate was still 5.6 percent lower than in June 2025.

Matthew Martin, an economist at Oxford Economics, said rising mortgage rates and the effect of higher inflation on household income would keep sales uneven in the near term and delay any sustained improvement. He said he did not see much room for stronger sales in the coming months.

Martin said mortgage rates had risen to 6.58 percent as of July 23, their highest level since August 2025.

The source also cited continued inflation pressure linked to elevated oil prices during the war in the Middle East. It said renewed fighting between the United States and Iran had unsettled global energy markets, with oil prices rising after US-Israel strikes targeting Iran since late February and Tehran's retaliation in nearly closing off the Strait of Hormuz, a key route for energy transit. Higher energy costs have contributed to pressure on US consumers ahead of key midterm elections.