New home sales dropped in July from the prior month and fell short of the market’s expectations, the latest indication that the improving housing market struggles to gain meaningful traction.
The Commerce Department said sales of new single-family homes in July were at a seasonally adjusted annual rate of 412,000, falling 2.4% from the upwardly revised June rate of 422,000. Economists had expected a rate of 430,000 in July, according to a survey by Bloomberg.
The latest figures from the Commerce Department are sure to disappoint those with an eye on the housing market, especially after many other metrics in recent weeks indicated that the market is performing well. The housing sector’s recovery is progressing slowly, according to many observers, who also see continued improvement in the back half of the year. Those bullish about the sector are hopeful that slower price growth for homes, bolstered by more inventory, and sharp increase in rent prices will encourage more potential home buyers to dip into the market.
The July figure was the second-worst performing month in 2013, only besting the level reported for March. Growth in the South was offset by declines in all other markets, including double-digit percentage drops for the Northeast and West. On a positive note, the July figure was 12% above the rate a year ago.
The median sales price of new homes sold in July was $269,800, down from $273,500 in June. New-home supply stood at 6 months at the current sales rate.