US new home sales hit 9-month low in July

US new home sales hit 9-month low in July
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Washington: US sales of newly-built single-family homes fell to a nine-month low in July, marking the second straight decline and underscoring weakness in the housing sector.

The result was a downcast start to the third quarter for the housing sector, which is unlikely to contribute to GDP growth in the July-September period.

Sales fell 1.7 percent to an annual rate of 627,000, seasonally adjusted, surprising economists who had predicted a one percent increase.

Analysts say a lack of available homes, driven by sluggish construction due to scarce labor and increasingly costly materials, has produced a very tight market — pushing prices up and making homeownership simply unaffordable for many.

A sharp drop in the Northeast helped offset gains in the Midwest and the fire-stricken West.

Amid falling sales, mortgage rates have begun to decline and inventories have risen.

But compared to July of last year, the median prices rose six percent to $328,700. Average prices jumped 6.7 percent to $394,300.

The monthly change was within a margin of error, however, and officials caution that trends take six months to emerge.

But there are increasing signs that housing is the one dark spot in an otherwise robust economy.

Industry figures released this week also showed a two-year low in the pace of sales for existing homes, a much larger market.

The July sales figures also come amid a slump in new home construction, which tends to track sales and has trended lower since the start of the year, showing no signs of a pickup anytime soon.