Permits were up 0.1% in June.
The slight uptick comes as mortgage rates continue to rise.
“New home sales were solid in July because of an ongoing housing deficit in the U.S. and a lack of resales stemming from many homeowners electing to stay put to preserve their low mortgage rates,” says Alicia Huey, chairman of the National Association of Home Builders and a custom home builder and developer from Birmingham, Alabama. “But builders are still confronting many challenges, including rising mortgage rates, supply chain issues for electrical transformers, a dearth of skilled workers and elevated construction costs.”
Next month’s report might be less rosy, says Robert Dietz, NAHB economist chief economist.
“Despite this monthly uptick, new home sales will likely weaken in August as higher interest rates price out prospective buyers,” says Dietz. “Mortgage rates increased from 6.7% at the start of July to above 7% in August.”