US new homes sales fall in July

New home sales in the US fell in July 2019 compared with the prior month (AFP Photo/JUSTIN SULLIVAN)

Washington (AFP) - Sales of new US homes declined in July, while home prices rose and the inventory of available homes climbed slightly, according to government data released Friday.

The sharp decline in July, which left sales below analyst estimates, was due in part to a significant upwards revision to June sales, according to US Census data.

New single-family home sales for July came in at an annual rate of 635,000, a 12.8 percent drop from the June figure, which was revised up by more than 80,000 homes from the original estimate to 728,000.

July sales were nevertheless 4.3 percent higher than in July 2018.

The report comes on the heels of data earlier this week that showed a jump in existing home sales for July, an increase attributed in part to lower mortgage rates.

The data showed the median price of homes was $312,800, up 2.2 percent from June.

The seasonally-adjusted estimate of available homes on the market was 337,000, meaning it would take 6.4 months to clear the supply, up slightly from the level last month.

Lawrence Yun, chief economist of the National Association of Realtors, said the data show that sales of new homes are taking place 3.4 months after completion, a "reasonably swift" pace that shows demand is outpacing supply.

Yun bemoaned data showing sluggish new home construction.

"One way to help new home construction is to lower the cost of construction," said Yun, who warned that higher material costs are weighing on homebuilders.

"To the degree that tariffs are filtering into the broad supply-chain system and raising the price of building materials, homebuilders will face challenge," Yun said.