Sharp Tumble for U.S. New Home Sales in July

Perhaps another harbinger of a slowing economy stateside. Numbers released Friday morning by the U.S. Commerce Department showed sales of new U.S. homes fell a sharp 12.8% in July as higher prices and limited inventory sidelined would-be buyers.

The department says that new homes sold at a seasonally-adjusted annual rate of 635,000 units, down from a revised June rate of 728,000. So far this year, sales have risen, but just 4.1%.

The fall is being attributed to a shortage of available homes, worsened by a construction slowdown, which have combined to push up prices and made purchases less affordable for Americans. Land and labour shortages continue to slow down builders, prolonging the housing shortage.

As a result, even lower borrowing costs have so far failed to induce more sales.

The median sales price of new homes south of the border fell to $312,800, down 4.5% from a year ago, but marking the highest level since April.