New home sales decline; Economic indicators edge lower

Sales of newly built single-family homes remained buffeted in July by factors such as elevated interest rates and building costs, declining 0.6% from the prior month and dropping 8.2% from a year earlier, the government reported Monday.

New houses sold at a seasonally adjusted annual rate of 652,000 units in July, according to the latest figures from the Commerce Department and Department of Housing and Urban Development. The median sales price was $403,800, down 0.8% from June and 5.9% below the July 2024 median of $429,000.

“Elevated mortgage rates and ongoing economic uncertainty are weighing heavily on buyer demand,” Buddy Hughes, chairman of the National Association of Home Builders, said in a statement Monday from the trade group. “Meanwhile, an elevated inventory of unsold homes, fueled by lagging sales, is prompting concerns over potential cutbacks in new construction.”

Jing Fu, the NAHB’s senior director of forecasting and analysis, said affordability challenges continue to sideline prospective buyers, with the majority of new homes now concentrated in the $300,000 to $500,000 price range. An earlier mid-year report from NAHB and Wells Fargo found that families earning the U.S. median income needed 36% of income to cover mortgage payments on a median-priced new home, rising as high as 71% for lower-income families.

A mixed bag of U.S. economic trends, led by consumer pessimism, pulled down the Conference Board’s latest composite index of economic indicators, based on several metrics and using 2016 as a base of 100. July’s score was 98.7, falling just 0.1 points on a monthly basis but dropping 2.7 points for the full first half, the economic research group reported.

“Pessimistic consumer expectations for business conditions and weak new orders continued to weigh down the index,” Justyna Zabinska-La Monica, the Conference Board’s senior manager of business cycle indicators, said in a statement.

She said positive indicators for July included a relatively strong stock market and lowered initial claims for unemployment insurance compared with June. Despite slowing economic growth in the first half, the Conference Board does not project a recession but does expect factors such as tariff effects to weaken the U.S. economy in the second half of 2025.