Sales of newly constructed homes fell by 12.6% in July from June, to a seasonally adjusted annual rate of 511,000 units, according to the Department of Housing and Urban Development and the Census Bureau.
It was the second consecutive month of declines as the housing market is still being impacted by high mortgages, as the Federal Reserve aggressively increases interest rates to tame inflation.
June’s sales were revised down to 585,000 units from the previously reported 590,000 units. That’s the lowest sales number since January 2016.
A year ago, 726,000 newly constructed homes were sold.
According to July’s report, sales dropped 29.6% on a year-on-year basis in July. New home sales rose in the Northeast area, but plunged in the West and the Midwest as well as the more densely populated South.
Despite the fall in sales, house price growth remains strong. The median price for a new construction home rose to $439,400, up from $402,400 the previous month.
Houses under construction made up roughly 67.2% of the inventory, with homes yet to be built accounting for about 23.1%.