New home sales edge higher; Google parent plans to boost AI spending; Tesla sales drop

June’s U.S. sales of new single-family houses rose by a slight 0.6% from the prior month but were down 6.6% from a year earlier, according to the latest data from the Commerce Department and Department of Housing and Urban Development. Homes sold at a pace of 627,000 units, based on seasonally adjusted annual figures.

“New home sales remained flat last month, highlighting persistent weakness in the housing market despite seasonal expectations for growth,” Buddy Hughes, chairman of the National Association of Home Builders, said in a statement Thursday. “Elevated mortgage rates and sustained price levels continue to limit purchasing power, particularly among first-time and middle-income buyers.”

Nancy Vanden Houten, lead economist at Oxford Economics, said June new home sales were weaker than expected despite builder incentives aimed at encouraging purchases. The generally sluggish pace of May and June sales places some downside risk to the forecasting firm’s prior expectations for slightly stronger sales trends in this year’s second half.

Vanden Houten noted the inventory of new homes available for sale continues to climb and reached an 18-year high at the end of June, at 511,000 units, which could put a damper on new construction. “The buildup of supply will keep a lid on single-family starts in the months ahead,” she said in a statement.

Government data arrived a day after the National Association of Realtors reported June’s sales of existing single-family homes declined 2.7% from the prior month while posting no change from a year earlier. 

Google parent Alphabet is raising the stakes when it comes to investments in artificial intelligence and related technologies that have already driven several companies to expand their data center networks.

Executives of the Mountain View, California-based tech giant told analysts this week that the company plans $85 billion in capital spending during 2025, up $10 billion from a projection made in February. The investment boost is tied largely to enhancing Alphabet’s AI capabilities in an increasingly competitive business climate.

During a quarterly earnings call with analysts Wednesday, Alphabet Chief Financial Officer Anat Ashkenazi cited factors including “strong and growing demand” for its Google Cloud products and services, expected to spur increased spending on AI-enabled data centers and related storage systems. Ashkenazi said further increases in capital spending are expected in 2026.

Amazon earlier this year it said it planned more than $100 billion in capital spending in 2025, the majority of that geared to AI upgrades for its web services division. Analysts at JPMorgan said Alphabet’s increased investment could “foreshadow similar trends in spending appetite” from Amazon and other rivals such as Apple, Microsoft and Facebook parent Meta. 

Electric vehicle maker Tesla posted a 16% annual sales decline for the second quarter, marking its second straight quarter for decreased sales, and more challenges could be ahead based on recently approved federal tax and spending measures.

CEO Elon Musk warned analysts this week there could be a “few rough quarters” ahead because of the pending expiration of certain electric vehicle tax credits that Tesla has long expected to encourage EV sales for years to come. The recently passed “big beautiful bill” calls for a $7,500 federal EV tax credit to expire at the end of September.

Austin, Texas-based Tesla has completed or announced several large manufacturing plant expansions in the past few years, as it faces a growing global roster of EV competitors eating into its leading market share. Tesla earlier this month said second-quarter vehicle deliveries, at 384,000, dropped 14% from a year earlier.

Led by Tesla and GM’s Chevrolet, new U.S. electric vehicle sales totaled 103,945 units in June, down 1.4% from May, as used EV sales reached 32,043 for a 7.5% decline, according to Cox Automotive. The data firm said new EV sales declined 3.5% from a year earlier, while used EVs increased 51.3%.