Sales of New Homes Plummeted in July, Led by Northeast

(CN) - Sales of newly built homes unexpectedly slumped in July, experiencing their biggest drop in nearly a year.

The U.S. Census Bureau said Wednesday that new home sales fell 9.4 percent, to an annual rate of 571,000 homes. The drop was the largest the market has seen since August 2016.

July's decline follows a 1.9 percent increase in new home sales in June (when 630,000 homes were sold). Most industry analysts believed the July numbers would be roughly the same.

The consensus Wednesday morning was that a tight supply of homes and rising home prices put the brakes on buying last month.

The decline was led by a 23.8 percent decline in sales in the Northeast and a 21.3 percent drop in the West. The South also saw a decline, but by a much more modest 4.1 percent.

The only bright spot in Wednesday's report was the Midwest, where sales actually rose 6.2 percent in July.

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