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July New Home Sales Fall More Than Expected Despite Price Drop

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July New Home Sales Fall More Than Expected Despite Price Drop

New home sales in the US decreased more than projected last month even as median prices moved lower, government data showed Tuesday.

Sales of new single-family homes fell nearly 11% sequentially to a seasonally adjusted annual rate of 607,000 in in July, the Census Bureau and the Department of Housing and Urban Development said. Analysts polled by Bloomberg expected a print of 620,000.

The median price of new houses sold decreased 2.3% to $393,800 last month.

New home sales slumped 43% and 13% in the Midwest and South, respectively. The Northeast and West logged growth of 30% and 6.2%, respectively, according to the report.

Last week, official data showed that housing starts fell more than expected in July amid declines in both single and multi-family units, while building permits jumped to a five-month high.

Separately, S&P Global (SPGI) division S&P Dow Jones Indices said Tuesday that US home price growth accelerated annually in June, while values dropped in real terms for a 13th straight month.

The national S&P Cotality Case-Shiller Index rose 1.5% year over year in June without seasonal adjustments, up from a 1.2% gain the month prior, according to the data provider.

"While home prices continue to decline in real terms, lower inflation and firmer nominal home price growth in June helped slow that pace of erosion," said Rebecca Kaufman, associate director of commodities at S&P Dow Jones Indices. With 30-year mortgage rates hovering around 6.5%, the housing market continued to be under pressure, according to Kaufman.

"As financing costs are kept high for prospective buyers, current homeowners remain reluctant to give up the low mortgage rates secured in prior years," Kaufman said. "Because June typically falls near the peak of the homebuying season, price appreciation often moderates and market activity cools in the months ahead."

Meanwhile, the Federal Housing Finance Agency said US home prices were unchanged month over month in June. In the second quarter, prices advanced 2.1% annually and 0.3% sequentially.

Price: $433.70, Change: $-1.72, Percent Change: -0.40%

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