Sales of new single‐family houses in July were at a seasonally adjusted annual rate of 511,000, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.6% below the revised June rate of 585,000 and 29.6% below the July 2021 estimate of 726,000.
"New-home sales declined dramatically in July, falling to the lowest level since 2016. The deterioration in the market comes as a result of diminishing affordability due to years of rising prices as well as high mortgage rates," says Ali Wolf, chief economist at Zonda. "The silver lining is we’ve seen some signs of price elasticity into August. As builders have been willing to offer incentives or price cuts, consumers have shown their interest is still there, albeit with a lot of price sensitivity."
The median sales price of new homes sold in July was $439,400, while the average sales price was $546,800.
The seasonally adjusted estimate of new houses for sale was 464,000 at the end of July, representing a 10.9-month supply at the current sales rate.
“Overall, the July reading was well below our expectations, which will likely lead us to revise downward our expectations for sales in the near term,” says Doug Duncan, chief economist at Fannie Mae. “While the recent decline in mortgage rates may help sales to an extent, mortgage rates remain 227 basis points higher than a year ago, which will continue to weigh on demand for the foreseeable future.”