Worst Annual Pace in 3 Years For New Home Sales

New home sales in July were expected to remain steady after scoring a slight gain in June, instead they plunged to a rate even lower than those a year earlier. Three of the four geographic regions shared in the decline,

Sales of newly constructed homes in July are estimated at a seasonally adjusted annual rate of 571,000 units.  This is down 9.4 percent from June and 8.9 percent from the estimate for July 2016. The bad news was mitigated a bit as the U.S. Census Bureau and the Department of Housing and Urban Development revised their earlier June estimate to 630,000 units from their original estimate of 610,000.

The consensus of analysts polled by Econoday was for the number to come in unchanged from June's 610,000 units. The range of estimates was 590,000 to 622,000 units.

On a non-seasonally adjusted basis there were 49,000 new homes sold. There were an estimated 58,000 units sold in June, and 54,000 the previous July.

The median sales price in July was $313,700, up from $295,000 a year earlier. The average price was $371,200 versus $355,000 in July 2016.

The months of available supply increased substantially, from 4.7 months (unadjusted) in June and 4.4 months in July 2016 to 5.7 months. Slowing sales, however, played a large role in this improvement.  The actual number of homes in the inventory rose by only 5,000 from June to 277,000 units.

The Midwest was the only region to post increased sales for the month, up 6.2 percent.  Sales were still 12.7 percent lower than the previous July.

Sales in the Northeast fell by 23.8 percent from those in June and were 13.5 percent behind a year earlier. The South saw a decline of 4.1 percent for the month and 11.7 percent year-over-year. Sales in the West, while still higher than a year earlier by 1.4 percent, declined 21.3 percent from June.