According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built, single-family homes inched down 1.7 percent in July to a seasonally adjusted annual rate of 627,000 units after an upwardly revised June report. On a year-to-date basis, sales are up 7.2 percent from this time last year.
"A lack of overall housing inventory is pushing up home prices, which is hurting affordability and causing prospective buyers to delay making a home purchase," said Randy Noel, chairman of the National Association of Home Builders (NAHB).
"Although this month marks the lowest sales pace since last October, we continue to see solid housing demand due to economic strengthening and positive demographic tailwinds," said NAHB Senior Economist Danushka Nanayakkara-Skillington. "Builders need to manage rising construction costs to keep their homes competitively priced for the newcomers to the housing market."
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the July reading of 627,000 units is the number of homes that would sell if this pace continued for the next 12 months.
The inventory of new homes for sale was 309,000 in July, which is a 5.9-month supply at the current sales pace. The median sales price rose to $328,700.
Regionally, new home sales rose 10.9 percent in the West and 9.9 percent in the Midwest. Sales fell 3.3 percent in the South and 52.3 percent in the Northeast. Year-to-date, sales in the Northeast are down 14.5 percent as that region deals with impacts from tax reform and persistent affordability issues.