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New Home Sales Fall 2.4% in July

rowofhomesSales of new homes disappointed again in July, slipping further after a discouraging June.

In a release on Monday, the Commerce Department estimated new home sales last month were at a seasonally adjusted annual pace of 412,000, a decline of 2.4 percent month-over-month.

Economists had forecast a sales pace of 430,000, while the Mortgage Bankers Association (MBA) anticipated a sales rate of 433,000.

June sales received a slight upward revision to a rate of 422,000, while May sales were also bumped up in a second revision to 454,000—still far below the 504,000 originally reported by the government.

Year-on-year, July sales improved, increasing 12.3 percent from a weak July 2013.

After gaining momentum through the end of last year, new home sales have failed to keep pace for most of 2014 as adverse weather conditions and poor economic growth in the first quarter held the housing market down.

In reaction to those headwinds, homebuilder confidence slipped dramatically in the year's first few months, though sentiment has picked up with the start of spring. As of August, the National Association of Home Builders' gauge of builder confidence in the new, single-family home market measured 55, marking three straight months of increases even as sales have come up short.

NAHB Chief Economist David Crowe explained that the recent streak of improvements reflects high hopes for the coming months.

"Builders are seeing buyers that normally would have been buying several years ago, but because of economic conditions had postponed that purchase," he said. "So they're more confident that the pent-up demand will be released."

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.
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