New home sales fell 13.4% in July from a month earlier, but are still above year-ago levels, according to new data.
The Commerce Department said Friday that sales of newly built homes reached a seasonally adjusted annual rate of 394,000. The sales came in far below expectations, and June’s five-year high was revised downward. Higher interest rates may have tempered demand.
Still, new home sales were 6.8% more than a year earlier.
Both supply and home prices increased in July compared with a month earlier. Buyers paid a median of $257,200 for a new house last month. If new homes continued to sell at the current rate, there would be a supply of 5.2 months.
The housing recovery has builders increasingly optimistic about the new-home market, but they have yet to ramp up construction to normal levels. Developers cite the lack of ready-to-go lots and a shortage of qualified labor among their concerns.