US new home sales slump in July

Sales of new US single-family homes fell more than expected in July, according to data released by the Commerce Department on Friday.

New home sales dropped by 12.8% to a seasonally-adjusted annual rate of 635,000 units, massively undershooting expectations for a 0.2% dip. June’s sales pace was revised to 728,000 from 646,000.

Compared to the same month a year ago, sales were up 4.3% from 609,000. Meanwhile, the median price of a new home was $312,800 compared to $306,000 in June.

Capital Economics said: "The substantial drop in new home sales in July is not as bad it looks, as a large upward revision to the previous month’s estimate meant that decline came from a 12-year high.

"A slowing economy rules out a strong rise in new sales over the next few months, but a healthy inventory and low mortgage rates mean sales will see a small gain to around 670,000 annualised by the end of the year."