Sales of new single-family homes took a big 13.4% month-to-month nosedive to a seasonally adjusted annual rate of 394,000 for July, according to a Commerce Department report (link opens a PDF) released today. That's the lowest pace in nine months.
After hitting an unrevised recovery high in June, this latest report shows volatility remains. July's numbers came as a surprise to analysts, who had expected another solid month of sales at an annual rate of 487,000.
On a regional level, the West, South, and Midwest all took major month-to-month dips. Sales in the West dropped 16.1%, the South cooled off 13.4%, and the Midwest recorded a 12.9% decrease. Northeast sales tapered off 5.7%. Despite this month's dip, national sales of new homes have still managed a 6.8% increase over the past 12 months.
At the current rate of sales, there is an estimated 5.2 months of supply, compared with just 4.3 months in June. The median sales price of new homes dropped $1,300 to $257,200 for July. The average sales price was $322,700, a month-to-month increase of $20,500.
This latest report follows on the heels of a National Association of Realtors report thsi week that recorded a 6.5% increase in existing-home sales in July and a report from Freddie Mac showing mortgage rates rising.
Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to industry groups.
-- Material from The Associated Press was used in this report.