Sales of new U.S. homes tumbled to a smaller-than-expected seasonally adjusted 1.072 million annualized rate in July and a key inventory measure jumped to a ten-year high, pointing to a rapidly cooling housing market, a government report showed on Thursday.
New homes sales fell 4.3 percent last month, the biggest drop since an 11.5 percent plunge in February and the lowest annualized rate since February as well, the Commerce Department said. Analysts polled by Reuters were expecting sales to ease to a 1.100 million annual rate.
The supply of homes available for sale at the current sales pace rose to 6.5 months, the highest level since a 6.8 months' supply in November 1995.
There were 568,000 new homes available for sale at the end of the month, a record high, according to the report.
The median sales price of a new home slipped to $230,000 but was still above the median $229,200 price in July 2005.
Sales plummeted 8 percent in the South, the busiest sales region, and by 21.3 percent in the Midwest. They rose by 11.7 percent in the West, the second busiest sales region of the country, and by 1.8 percent in the Northeast.
New home sales are recorded on contract, usually before the home is built, and can be seen as a gauge of future economic activity.