U.S. sales of new single-family homes fell 10.5% in July to a seasonally adjusted annualized rate of 607,000 units, the U.S. Census Bureau reported on Monday. The decrease extended June's downward revision, when sales dropped 6.3% from the same month a year earlier, underscoring persistent headwinds in the housing market.
The median price of a new home declined 0.9% from a year ago to $393,800, marking the first annual decrease in more than a decade. Economists polled by Reuters had expected a sales pace of 620,000 units, a figure that was not met as buyers remained sensitive to elevated borrowing costs and home prices.
Thirty-year fixed mortgage rates, tracked by the Mortgage Bankers Association, stood at 6.77% for the week ending August 14, slightly below the recent peak of 6.81% recorded in late July. Since late February, when the U.S. and Israel launched strikes against Iran, mortgage rates have climbed roughly 0.60 percentage points, contributing to broader inflationary pressures.
The Federal Reserve has maintained its benchmark interest rate since December, though three officials dissented at the central bank's prior meeting, advocating for a hike to address inflation that has remained above target for more than five years. The housing market's sluggish performance reflects the interplay between policy tightening, affordability constraints, and cautious consumer sentiment.
