New single-family home sales rebounded slightly last month and broke a three-month streak of declines as prices resumed their march higher in the hot US real estate market, according to government data released Tuesday.
The one percent increase in July took the annual sales pace to 708,000, seasonally adjusted, the Commerce Department said, after the June sales rate was revised sharply upward from the original report.
But sales were more than 27 percent lower than July 2020, according to the data.
The median sales price dipped in June but jumped again last month to $390,500, without seasonal adjustment, beating the previous record set in May, even as the inventory of homes on the market edged up to 6.2 months of supply.
Builders have struggled to keep up with demand as low mortgage rates have fueled a buying frenzy, especially as they contend with supply bottlenecks caused by the restart from the pandemic shutdown that have caused price spikes for goods like lumber.
"While demand for new homes remains strong, high prices and backlogs in construction will temper sales in the months ahead," said Nancy Vanden Houten of Oxford Economics.
She noted that a record share of homes sold in July were not even started, indicating a huge construction backlog.
Sales were uneven across the country with a big jump in the West and modest gain in the South -- the two regions with the biggest markets -- and double-digit declines in the Northeast and Midwest.