US new home sales fall below pre-pandemic level in July

However, at least one top-ranked economist believed that the steepest declines might now be in the rear-view mirror, even if the same could not be said of prices.

According to the US Department of Commerce, in seasonally adjusted terms, the pace of new home sales fell at a month-on-month pace of 12.6% in July to reach 511,000 (consensus: 580,000).

Last month's drop also left new home sales 29.6% below their year-earlier level.

In parallel, the number of homes available for sale measured in terms of months' worth of sales leapt higher again, from 9.1 to 11.2.

The median sales price on the other rebounded from $414,900 in July to $439,400, while the average price soared from $457,300 to $546,800.

Commenting on the latest housing data, Pantheon Macroeconomics's chief economist, Ian Shepherdson, highlighted the large +/- 16.9% margin of error for the pace of new home sales in July.

In any case, Shepherdson went on to say that "affordability is no longer deteriorating now that mortgage rates and house prices have stopped rising.

"Accordingly, it's reasonable to assume that the steepest declines in sales are behind us, though they likely will fall a bit further."

But the economist went on to add that the rocketing supply of existing home prices would lead homebuilders to in turn cut their prices, resulting in sharp month-on-month falls over the foreseeable future.