WASHINGTON – Fewer Americans bought new homes in July, evidence that the housing sector is struggling to gain traction more than five years into the economic recovery.
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The Commerce Department says new home sales fell 2.4 percent last month to a seasonally adjusted annual rate of 412,000. The report also revised up the June sales rate to 422,000 from 406,000.
New-home sales plunged 30.8 percent in the Northeast, followed by smaller drop-offs in the Midwest and West. Purchases were up 8.1 percent in the South. Inventory of new homes on the market rose 6 months, a level last reached in October 2011.
Sales lost much of their momentum last October, derailed by modest wage growth, a bump in mortgage rates and builders focusing more on high-end homes for wealthier buyers.