New U.S. home sales drop to 394,000 rate in July

By Ruth Mantell

WASHINGTON (MarketWatch) -- Sales of new U.S. homes dropped 13.4% to a seasonally adjusted annual rate of 394,000 in July, the lowest rate since October, as all four regions posted declines, according to government data released Friday. Economists polled by MarketWatch had expected sales to pull back in July to a rate of 485,000, compared with an original June estimate that pegged the rate at 497,000. On Friday the U.S. Department of Commerce revised June's rate to 455,000. Rising mortgage rates may be behind July's drop, though the monthly data are quite volatile and economists had expected some pull back after sales gains in recent months. Looking longer-term, new-home sales in July were up 6.8% from the year-earlier period. By region, monthly sales fell 16.1% in the West, 13.4% in the South, 12.9% in the Midwest and 5.7% in the Northeast. The median price of new homes ticked down to $257,200 last month. The supply of new homes on the U.S. market in July jumped to 5.2 months at the current sales pace -- the highest since January 2012 -- from 4.3 months in June.

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New-home sales hit lowest rate since October