US new-home sales drop 2.4 percent in July to annual rate of 412,000

Industrials Associated Press

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.