Sales of new U.S. homes fell a sharp 12.8% in July as higher prices and limited inventory sidelined would-be buyers.
The Commerce 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 just 4.1%.
A shortage of available homes, worsened by a construction slowdown, has pushed up prices and made purchases less affordable for Americans. Land and labor shortages continue to slow down builders, prolonging the housing shortage.
As a consequence, even lower borrowing costs have so far failed to induce more sales.
The median sales price fell to $312,800. That is down 4.5% from a year ago, but marks the highest level since April.