Tim Mullaney, USA TODAY
New home sales plunged 13.4% in July, as builders sold new houses and condos at a clip of 394,000 a year.
Sales fell from a seasonally adjusted annual rate of 497,000 in June, the Census Bureau reported Friday, and were well below analysts' estimates of 487,000. Sales were 6.8% higher than last July. The median price was $257,200, up from $249,700 last month, and there were 171,000 homes for sale at the end of July, representing a five-month supply at the current sales pace, Census said.
The economy's hopes for a sharp rebound depend largely on how quickly home construction can move toward a more normal pace of 1.7 million new homes a year. That figure, unlike the numbers released today, includes apartment construction, Moody's Analytics said in a report last week.
Housing construction has been held down by tight credit and by people delaying forming new households because of the economy, and the gradual easing of those problems is leading to more homes being built.