(WASHINGTON) — New home sales plunged 13.4 percent in July to an annualized pace of 394,000 units — the biggest decline in sales since May of 2010.
“The drop was consistent across all regions of the country so it’s pretty pervasive and I think it was basically the result of the rise in interest rates,” said David Crowe, chief economist at the National Associate of Home Builders.
“Buyers took a breather,” Crowe said. “They stepped back from the market when they saw interest rates go up.”
Economists polled by Bloomberg were looking for new home sales to fall 2 percent to an annualized pace of 487,000 units.
Despite the dramatic dip last month, Crowe believes the downturn is temporary because housing prices are going up and jobs are returning.
Copyright 2013 ABC News Radio
Aaron Smith, CNN Newswire
Debra Goldschmidt, CNN
Matt Egan, CNN