(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.
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Chris Isidore and Robert Mclean, CNN Newswire
Sam Turner, Deseret News