Sales of new U.S. single-family homes improved in July after three straight monthly declines, but housing market momentum stateside is slowing as surging housing prices amid tight supply sideline potential buyers from the market.
The report from the U.S. Commerce Department on Tuesday showed builders were increasingly pre-selling homes, with about 75% the houses sold last month yet to be started or under construction. The report followed in the wake of news this month that single-family building permits fell in July, while confidence among homebuilders tumbled to a 13-month low in August.
The Commerce Department said sales of new dwellings rose 1.0% to a seasonally-adjusted-annual-rate of 708,000 units last month. June’s sales pace was revised up to 701,000 units from the previously reported 676,000 units.
Economists polled by Reuters had forecast new home sales, which account for a 10.6% of U.S. home sales, increasing to rate of 700,000 units in July. Sales dropped 27.2% on a year-on-year basis in July.
The median new house price soared 18.4% from a year earlier to $390,500 in July.
Sales were concentrated in the $200,000-$749,000 price range. Sales in the under-$200,000 price bracket, the sought-after segment of the market, accounted for a mere 1% of transactions.