New US single-family home sales slide in July, confidence dips in August

Sales of new U.S. single-family homes tumbled in July as high mortgage rates weighed on the market and continued to sideline potential home buyers, while consumer confidence slid to a seven-month low on darkening outlooks for the job market and inflation. New home sales dropped 10.5% to a seasonally adjusted annualized rate of 607,000 units last month — the lowest since January — from June's upwardly revised pace, the Commerce Department's Census Bureau said on Tuesday. New home sales, which are counted at the closing of a contract, account for a small share of U.S. home sales and tend to be volatile on a month-to-month basis. They fell 6.3% on a year-over-year basis in June. Economists polled by Reuters had estimated the sales pace at 620,000 units. The median new house price fell to $393,800 in July — the lowest in four years — and was 0.9% lower than a year earlier. Steep borrowing costs are a key factor keeping the housing in a deep funk. Indeed, a separate report Tuesday on consumer confidence from the Conference Board showed just 5.2% of American consumers intend to buy a house in the next six months, down from 6.5% in July and the largest decline in more than five years. "The housing market isn’t headed for a downturn, but rising mortgage rates and weaker growth in real disposable income due to elevated inflation will keep any rebound out of sight," Oxford Economics Senior U.S. Economist Matthew Martin said. The average interest rate on a 30-year, fixed-rate mortgage — the most popular type of U.S. home loan — is near the highest level in more than a year with little prospect for an immediate break for would-be homebuyers, thanks to inflation-wariness among Federal Reserve officials and across bond markets. The Mortgage Bankers Association last week said the 30-year mortgage contract rate held at 6.77% in the week ended August 14, just shy of its recent high of 6.81% at the end of July. Mortgage rates have now climbed by around 0.60 percentage points since the U.S. and Israel launched attacks against Iran in late February, driving up global oil prices and helping fuel higher inflation more broadly. Prices by the measure used by the Fed for its 2% inflation target have been rising at nearly twice that pace, though data due on Wednesday may show they moderated for a second straight month in July. The Fed has held rates steady since last December, though at last month's meeting three policymakers dissented against that decision, preferring that rates be lifted to thwart inflation that has held above target for more than five years. Fed Chairman Kevin Warsh, who took the leadership reins in May, is slated to deliver a keynote address on Friday at the Kansas City Fed's annual symposium in Jackson Hole, Wyoming. Investors and economists are eager to hear if Warsh will break with his reluctance to detail his thinking about the economy and inflation, and if he will address recent bond market trends and the Trump administration's efforts to control the behavior of longer-dated bonds, which have yielded mixed results at best. The 10-year Treasury note yields, which serve as a pricing benchmark for 30-year mortgages, has been trading near the highest since Trump returned to the White House in January 2025. Against that backdrop, consumer confidence skidded to the lowest since January. The Conference Board said its consumer confidence index dropped to 89.4 this month from a downwardly revised 90.2 in July. Economists polled by Reuters had forecast the index at 90.2 versus an originally reported 90.8 in July. The decline was led by a 7.8% slide in the expectations index, offsetting the first improvement in households' views of the current situation in four months. "Consumers are optimistic about today but increasingly nervous about tomorrow. Assessments of current conditions improved materially, while future expectations fell to their lowest level since January as Middle East tensions and income concerns weighed on sentiment," Jeffrey Roach, Chief Economist for LPL Financial, said. "Although employment conditions remain solid, fading expectations for income growth may act as a headwind to spending." The report's so-called jobs differential index, measuring the gap between respondents who say jobs are plentiful versus those who say they are hard to find, rose for the first time in three months from a July reading that was the lowest in more than five years. Consumers saw inflation accelerating over the next 12 months to 5.8% from 5.6% in July.

New US single-family home sales slide in July, confidence dips in August

New home sales and prices fall in July

High mortgage rates keep housing under pressure

Consumer confidence weakens on job and inflation worries

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