(New-home sales article updated with additional commentary and stock-price movement.)
NEW YORK ( TheStreet) -- Sales of newly built homes fell 12.4% in July to a seasonally adjusted all-time low rate of 276,000, the Commerce Department said Wednesday. The figure came in well below expectations for a rate of 334,000 after a revised rate of 315,000 in June, and added to the already dismal outlook for the U.S. housing market following Tuesday's weak existing-home sales data .
July's rate represented a 32.4% decline from year-earlier results, and the weakest month on record. Sales were strongest in the South and weakest in the Northeast.
The median sales price for new houses sold in July was $204,000, the report said, while the average selling price was $235,300. There were 210,000 new houses on the market at the end of July. It would take 9.1 months to work through that inventory at the current sales pace.Stocks in the homebuilder sector seemed to have already priced in the dismal data, especially in light of Tuesday's weaker-than-expected report on new-home sales. The SPDR S&P Homebuilders (XHB), an exchange-traded fund that tracks the homebuilder sector, closed up 3.2%. The iShares Dow Jones US Home Construction (ITB) gained 3.1%. NVR (NVR) rose 1.8%, PulteGroup (PHM) 3.1%, Ryland (RYL) 3.6% and M.D.C. Holdings (MDC) 4.4%. Shares of Toll Brothers jumped 5.8%. The luxury homebuilder said early Wednesday it returned to profitability for the first time since 2007. Wednesday's new-home sales data came a day after the National Association of Realtors said existing-home sales plummeted 27.2% in July to a seasonally adjusted annual rate of 3.83 million units. The figure was far worse than the expected rate of 4.72 million units after a downwardly revised rate of 5.26 million in June. The data sparked a heated debate among readers of TheStreet. Join the discussion here. >>Existing-Home Sales: Winners & Losers Even record-low and near-record-low mortgage rates have failed to spark demand for housing in recent months. The average rate on a 30-year fixed mortgages fell to 4.55% in the week ended Aug. 20, the Mortgage Bankers Association said Wednesday. It was the lowest rate since 1990, falling from 4.6% in the prior week.
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