New orders for big-ticket durable goods fell in July by the most in nearly three years, as orders and shipments for core-capital goods surged, according to a new report, while a separate one showed the market for existing home sales declined following a drop in new home sales.

The 6.8% drop in orders for new durable goods was largely due to drop in the volatile aircraft sector and follows a revised 6.4% improvement in June, according to the Commerce Department. Many analysts were anticipating a slightly larger decline.

Excluding transportation orders, new orders for durable goods increased 0.5% in July, marking three consecutive monthly improvements.

Shipments of durable goods increased 0.4% in July from the month before, the third straight monthly gain.

The closely watched orders for nondefense capital goods minus aircraft, an indicator of business investment, increased 0.4% in July, slightly better than Wall Street expectations, and is up from being nearly unchanged in June. Compared to July 2016, orders for these goods are up 3.3%.

Shipments of core capital goods jumped 1% in July following an upwardly revised to a 0.6% increase in June following an originally reported 0.1% gain. Core capital goods shipments are used to calculate equipment spending in the government's gross domestic product measurement. 

The gain in durable goods shipments translates into a “special plus and one that will lift gross domestic product,” once the third quarter is over and numbers are released, according to analysts at Econoday.

“Positives are definitely the theme of today's report, one that helps offset last week's unexpected decline in manufacturing production and supports the enormous strength being signaled by advance regional reports,” they said. “The economy may very well get a solid second-half boost from what has been an improving factory sector.”

Existing Home Sales Drop Following New Home Decline

On the other hand, sales of existing homes in the U.S. unexpectedly hit their lowest level of the year, according to the National Association of Realtors – but not because people didn't want to buy homes.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, slipped 1.3% to a seasonally adjusted annual rate of 5.44 million in July. July’s sales pace is still 2.1% above a year ago.

Lawrence Yun, NAR chief economist, says the second half of the year got off on a somewhat sour note as existing sales in July inched backward.

“Buyer interest in most of the country has held up strongly this summer and homes are selling fast, but the negative effect of not enough inventory to choose from and its pressure on overall affordability put the brakes on what should’ve been a higher sales pace,” he said. “Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month.”

The median existing-home price for all housing types in July was $258,300, up 6.2% from July 2016. July’s price increase marks the 65th straight month of year-over-year gains.

“Home prices are still rising above incomes and way too fast in many markets,” said Yun. “Realtors continue to say prospective buyers are frustrated by how quickly prices are rising for the minimal selection of homes that fit buyers’ budget and wish list.”

Fifty-one percent of homes sold in July were on the market for less than a month.

“July was the fourth consecutive month that the typical listing went under contract in under one month,” said Yun. “This speaks to the significant pent-up demand for buying rather than any perceived loss of interest. The frustrating inability for new home construction to pick up means inadequate supply levels will keep markets competitive heading into the fall.”

This follows a report from a couple of days earlier showing new home sales also slid in July, with the much of the decline being blamed on a short supply of homes, rather than weakness in the sector.