WASHINGTON ( TheStreet) -- Sales of newly built homes dipped 0.7% in July to a seasonally adjusted annual rate of 298,000, the Commerce Department said early Tuesday, disappointing economists' expectations as the key figure fell for the third consecutive month to a five-month low.
Despite coming in worse than expected, July's new-home sales rate was 6.8% higher than year-earlier figures. The median sale price of new homes sold last month was $222,000; the average sales price was $272,300. On a seasonally adjusted basis, there were 165,000 new homes for sale at the end of July, representing a 6.6-month supply at the current sales rate. The housing market is still a ways off from any sense of real recovery as potential buyers remain cautious, home inventories remain high and building activity remains sluggish, according to an analyst with the Credit Union National Association.
"Unfortunately, none of the data we see suggest that there will be a significant turnaround anytime soon," Mike Schenk, vice president of economics and statistics with CUNA, told TheStreet recently. "While mortgage interest rates are near all-time lows and housing affordability is near all-time highs, consumers remain cautious, builders remain dejected ... and permit activity suggest very little new construction on the horizon." Data released earlier this month showed that homebuilders began construction on 1.5% fewer homes in July while applications for building permits fell 3.2%. The National Association of Home Builders (NAHB) reported that homebuilder sentiment held steady at a low reading of 15 in August as the usual suspects -- an oversupply of homes, inaccurate appraisal values and tight lending -- kept home purchasers at bay.