New home sales declined 12.6% in July to a seasonally adjusted annual rate of 511,000, the Census Bureau announced. The rate was down 29.6% compared with July 2021 and was the lowest level recorded since January 2016.
“The sharp drop in new home sales is another clear indicator that housing is in a recession,” stated Danushka Nanayakkara-Skillington, assistant VP for forecasting and analysis at the National Association of Home Builders. “The combination of higher prices and increased interest rates are generating a notable slowing of the housing market.”
Regionally, year-to-date, new home sales dropped in all four regions, declining 26.5% in the Midwest, 15.7% in the West, 14.9% in the Northeast and 13.4% in the South.
The median sales price rose 5.9% from June to $439,400. New single-family home inventory soared 81.7% compared with July 2021, reaching 464,000—a 10.9-month supply at the current sales pace.
