New home sales rose 4.4 percent in July to 714,000 annualized units, while sales in June were revised down 13,000 units. Compared to last year, July’s sales were 31.5 percent higher. NAFCU Vice President of Research and Chief Economist Curt Long analyzed the data in the Macro Data Flash report.
“While the rise in mortgage rates has dampened the housing market overall, it has also funneled potential buyers to the new home market, where builders are willing to provide rate buydowns as an enticement,” wrote Long. “Nevertheless, there are signs that new home sales are poised to slow. Permits, housing starts, and units completed have continued to show some retrenchment going into July following massive gains in May.”
Based on current month sales, there were 7.3 months of supply in July, down 0.2 months from June. The number of unsold homes left on the market increased 9,000 to 437,000. This represents an 8.7 percent decline from inventory levels a year ago.
Regionally, sales increased in the Midwest (47.4 percent), followed by the West (21.5 percent). Sales fell in the South (-6.3 percent), and in the Northeast (-2.9 percent).
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