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Sales of new single-family homes in the United States fell more than expected in July, highlighting ongoing challenges in the housing market. Government data revealed that new home sales dropped to a seasonally adjusted annual rate of 652,000 units last month. Industry analysts attribute this decline to persistently high mortgage rates, which have dampened buyer demand.
The average sales price of new homes sold in July was just over $487,000. This figure reflects the broader economic pressures affecting the housing market, where affordability remains a significant concern. According to Reuters, high borrowing costs continue to stifle housing demand, making it difficult for many potential buyers to enter the market.
Despite the decline in new home sales, existing home sales showed a slight improvement, rising by 2% in July compared to the previous month, as reported by the National Association of Realtors. This increase in existing home sales offers a glimmer of hope in an otherwise sluggish market.
Mortgage rates, currently averaging around 6.6%, remain a key factor influencing the housing market. As noted by NPR, these rates have kept many potential buyers on the sidelines, unable to afford new homes. The Federal Reserve's upcoming decision on interest rates in mid-September could impact mortgage rates further, potentially affecting the housing market's trajectory.