July New US Home Sales Falter After Encouraging Spring

From near post-recession high in June, July sales declined steeply in three of four regions; year-to-date sales show considerable strength


After reaching their second highest post-recession level in June, sales of new single-family homes in the U.S. fell 9.4% over the month of July to a 571,000-unit seasonally adjusted annual rate. Despite the decline, year-to-date sales are 9.2% above their level in the first seven months of 2016.

Three of the four regions of the country experienced declines:

  • Northeast: -23.8%
  • West: -21.3%
  • South: -4.1%

The Midwest region recorded a 6.2% increase in sales.

While new home sales fell in July, year-to-date, the number of new home sales is 9.2% ahead of its pace over the same period in 2016. In addition, each region recorded sales from January to July that exceed the same period in 2016:

  • Northeast: 16.1%
  • Midwest: 14.6%
  • South: 6.8%
  • Midwest: 5.8%

The months’ supply of homes rose 11.5% over the month to 5.8 months. However, this increase largely reflects a decrease in the sales pace, from 630,000 to 571,000. Meanwhile, the number of new homes for sale in July, 276,000, was 1.5% above its level in June. Over the past year, inventory has shown signs of improving as the sales pace fell 8.9%, but the number of new homes for sale rose by 16.5%. Nevertheless, months’ supply remains below the 6.0 month-benchmark for a healthy housing inventory.

By stage of construction, the 4,000-unit increase (seasonally adjusted annual rate), reflected a slight increase in the number of homes not started, from 49,000 to 51,000, and in the number of homes completed, from 65,000 to 67,000. Meanwhile, the number of new homes for sale that are under construction remained unchanged at 158,000.

The median sales price rose 0.67% over the month to $313,700. Since sales fell, the increase in the median sales price likely reflect changes in the composition of new homes sold. Over the month, sales of new homes priced under $300,000 fell 1% to 47% while sales of new homes priced above $300,000 rose 1% to 53%.