July's new home sales dropped to new low for 2017

Aug. 23 (UPI) -- Sales of new U.S. homes in July sagged to a new monthly low for 2017 -- which also represented the largest drop in one month so far this year, two federal agencies announced Wednesday.

The Census Bureau and Department of Housing and Urban Development reported Wednesday that sales of new homes last month were at a seasonally adjusted rate of 571,000 -- 9.4 percent lower than June's number and 8.9 percent down from a year ago.

Officials said the median sales price was $313,700 and average price was $371,200 -- and noted it would take six months to exhaust the entire supply of new homes.

July's figure marked a new low for 2017. The previous low was 590,000 for April.

"This looks bad, but note that sales over the previous three months were revised up by a total of 46K," Ian Shepherdson, chief economist for Pantheon Macro, said Wednesday. "Prices are rising too, but the data are so volatile that it's hard to be sure what the underlying trend rate of increase is at any given point."

He called the report "disappointing," but said he expected an increase for August based on mortgage application data.

The national inventory rose 1.5 percent to 276,000 units in July, the highest level since 2009.

Department figures also said sales so far this year are running 9.2 percent higher than in the same period last year.

Most new homes sold were in the South (326,000), followed by the West (144,000), Midwest (69,000) and Northeast (32,000).

"The unemployment rate is at a 15-year low, the economy is growing, the stock market is strong, and home prices continue to rise, putting equity in the pockets of those who may want to sell their existing home and move to a new one," Homebuilder CEO Douglas C. Yearley, Jr., said in a statement. "New home prices are significantly outpacing existing home prices. Many buyers want new and they want it their way: That's exactly what we provide. This bodes well for Toll Brothers over the coming years."

The monthly new home sales and construction reports are based on small samples of data and are often revised.