WASHINGTON – The pace of new single-family home sales plunged by 9.4% to a much weaker-than-expected 571,000 seasonally adjusted annual rate in July, following upward revisions to the sales pace in the previous three months, data released by the Commerce Department Wednesday showed.
The sales pace was expected to print at 613,000, based on an MNI survey of economists.
The supply of new homes for sale rose by 1.5% to 276,000 in July, hitting its highest point since June 2009. Housing starts fell back slightly in July after a surge in June, suggesting supply could slow in the coming months. Based on the movements in sales and supply in July, the months supply jumped to 5.8 months from 5.2 months in June, the highest since September 2015 and well ahead of the 4.5 months supply a year ago.
Despite the increase in supply, the median sales price of new homes rose by 0.7% to $313,700 in July and was up 6.3% from July 2016.
Sales fell by 23.8% in the Northeast, 4.1% in the large South region and by 21.3% in the West region, while there was a 6.2% increase in the Midwest.
New home sales in June were revised up to a 630,000 rate from the 610,000 rate previously reported, while May sales were revised up to a 618,000 rate from the 605,000 pace previously reported. April sales were revised up to a 590,000 pace from the previously reported 577,000 rate.
The July rate of 571,000 was well below the 613,000 average pace in the second quarter after revisions were included, a rough start to 3Q. However, year-to-date sales, before seasonal adjustment, were up 9.2% from the same seven month period a year ago.
