Sales of new single-family homes dropped 12.8 percent from June to July, according to the latest data released Friday by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. Despite the big month-over-month drop, new home sales were up 4.3 percent year-over-year in July.
The median sales prices of all new homes sold in July clocked in at $312,800 while the average sales price came in at $388,000. At the end of the month, inventory was reported as 6.4 months of supply at the current sales rate.
Earlier this week, the National Association of Realtors released its existing home sales data, which say positive gains both month-over-month and year-over-year. This report, according to John Pataky, the executive vice president at TIAA Bank, shows that new home sales have not received the same boost.
“The Fed cut mortgage rates to near historical lows, but unfortunately this just does not seem to be enough to drive buyers to new homes,” Pataky said. “Additionally, consumers are reading a range of scary headlines about the economy and might be starting to feel uncertain about a major financial decision like buying a house. The housing market has always been volatile, so we shouldn’t jump to any conclusions based on one report, but this one was not a mark in the positive column.”
Odeta Kushi, the deputy chief economist at First American had a different take, however.
New home sales in July up 4.3% YoY and June revised to 728,00 from 646,000. Highest levels since 2007. All that pent up demand for homes is coming to market as borrowing costs come down.
— Odeta Kushi (@odetakushi) August 23, 2019