Steel Products

New Home Sales Plummet in July

Written by Sandy Williams

New home sales plummeted 13.4 percent to an annualized pace of 394,000 in July, well below Junes’ initially reported 497,000 and the revised pace of 455,000.  Economists expected sales to decrease in July to an annualized pace of 490,000, based on the initially reported June figure.

Rising rates may be a factor in decreased home sales for the month and, some say, a potential threat to future sales. Freddie Mac reports 30-year fixed-rate mortgages averaged 4.56 percent for the week ending August 22.  

“It’s definitely a rate shock,” said Doug Duncan, chief economist at Fannie Mae in Washington. “You could see another month or two of weak sales or it could go longer. This is a sustainable recovery, but we’ve also said it’s not robust. Along the way, there will be some hiccups. This is certainly a hiccup.”Median price of new homes increased to $257,200 with the average sales price at $322,700.” 

July sales fell from June levels by 5.7 percent in the Northeast, 12.9 percent in the Midwest, 13.4 percent in the South and 16.1 percent in the West region.

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