New home sales in the U.S. declined in July, according to the Commerce Department, falling for the second month in a row and hitting a four-month low.
The 2.4% decline from the month before pushes the annual rate down to 412,000, following an upwardly revised June annual performance of 422,000. Sales for May and April were also revised higher from previous reported figures.
Compared to July 2013, the number of new home sales is 12.3% higher.
“Housing activity remains modest, with continued declines in new home purchases juxtaposed with several months of improvement in existing home sales,” said Linsey Piegza, chief economist at the investment firm Sterne Agee. “Underlying the month-to-month volatility remains the inadequate momentum in the labor market; consumers remain restrained by lackluster income and job creation."
She said going forward, despite easy money policies and the Federal Reserve’s continued commitment to low rates, consumers will continue to struggle to make large purchases with little savings and minimal wage pressures.
The South had the only region where year-to-date sales are higher than they were during the same time last year, gaining 5.4%, with the Northeast down 19%, the West falling 11% and the Midwest, off 3%. The South also had the only increase in sales of any region for July compared to June.
The performance of new homes sales in July is in stark contrast to sales of existing homes for the month, at their best pace of 2014 and up four months in a row, while new housing starts hit the highest level in eight months.