Sales of new, single-family homes fell month-over-month by 12.8% in July, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
The report states that an estimated 635,000 homes were sold for the month, far below the estimated total for June of 728,000. New home sales, though, represent a year-over-year increase of 4.3%.
“As summer temperatures rose homebuyers moved to cooler vacation spots for some respite. Even with mortgage rates below 4%, new home sales declined in July, to a pace of 635,000 units, down 12.8% from June … While consumer optimism remained upbeat and resulted in higher retail spending, the prospect of continuing low mortgage rates has removed the sense of urgency for buyers of new homes,” said George Ratiu, Senior Economist at realtor.com.
Ratiu said the drop in sales was accentuated by double-digit declines in all major regions, except the northeast.
The regions hit the hardest were the south and the west, which saw sales of new homes fall 16.1% and 14.2%, respectively. Both regions reported increases when compared to July 2018.
The report states that the price of new houses sold for the month was $312,800. The average sales price was $388,000. The number of homes for sale in July 337,000, which represents a 6.4-month supply—a month-to-month increase of 16.4%.
According to the report, the median-sales price for June was $306,000 with just a 5-months supply of housing.
Although new homes sales fell, sales of existing homes increased 2.5% in July, according to the National Association of Realtors (NAR).
“Falling mortgage rates are improving housing affordability and nudging buyers into the market,” said Lawrence Yun, NAR’s Chief Economist.
Yun, however, noted that the inventory for affordable housing is “severely low,” and that shortage has caused home prices to rise.
Housing inventory for the month fell to 1.89 million from 1.92 in June, and a year-over-year drop of 1.6%. Unsold inventory is currently at a 4.2-months supply, a slight decline from June’s supply of 4.4 months.