Housing Woes Continue to Mount

July new-home sales fall 4.3% as inventory reaches record levels.
Author:
Publish date:

Updated from 10:15 a.m. EDT

New-home sales fell 4.3% in July and inventories rose to record levels, as the U.S. housing market continues its downward spiral.

The Commerce Department said Thursday that sales of new single-family homes came in at a seasonally adjusted annual rate of 1.072 million houses, down from the revised rate of 1.12 million in June and dropping 22% from 1.367 million from a year earlier

Economists' expected an annual sales rate of 1.105 million, according to

Reuters

.

The median sales price of new houses sold in July was $230,000, flat with a year earlier.

The seasonally adjusted estimate of new houses for sale at the end of July rose to the highest-ever number of 568,000 from 566,000 at the end of June. The inventory represents a supply of 6.5 months at the current sales rate -- up 55% from a year earlier and the highest months' supply since 1995.

"One thing that concerns me is the inventory," says Phillip Neuhart, an economic analyst with Wachovia.

Beaten-down shares of homebuilders rose on the news, which came a day after the National Association of Realtors said existing-homes sales in July fell to

the lowest level in 2 1/2 years as inventory rose to a new high.

Toll Brothers

(TOL) - Get Report

shares recently were up 2.1% to $25.06,

Pulte Homes

(PHM) - Get Report

rose 2.2% to $28.71, while

Ryland

(RYL)

gained 1.2% to $41.79.