July home sales up 1%; prices hit record levels

Sales of new homes rose a modest 1 percent in July after a string of declines as new home prices soar to record levels.

Sales last month reached a seasonally adjusted annual rate of 708,000, the Commerce Department reported Tuesday. Sales had fallen in April, May and June as builders confronted surging lumber prices and a shortage of workers.

Home prices continue their upward trajectory to new heights. The median price of a new home sold in July climbed to an unprecedented $390,500, up 18.4 percent from a year ago, while the average sales price in July hit a record $446,000, up 17.6 percent from a year ago.

Even with the small sales gain in July, new home sales are 27.2 percent below the pace of a year ago. Sales peaked at a rate of 993,000 units in January but have cooled since then, though remain at historically high levels.

The National Association of Realtors reported Monday that sales of existing homes rose 2 percent in July compared to June to a seasonally adjusted annual rate of 5.99 million units while the price of an existing home sold in July climbed 17.8 percent from a year ago to $359,900, near the all-time high set in June.