New home sales slump in July, raising worries


WASHINGTON — Sales of new homes slumped in July with all regions seeing sizeable drops, raising questions about the recovery in the market.

New-home sales fell 13.4 percent to a seasonally adjusted annual rate of 394,000 in July, the lowest rate since October, the U.S. Department of Commerce reported Friday.

Rising mortgage rates may be behind July’s drop, though the monthly data are quite volatile and economists had expected some pull back after sales gains in recent months. Longer-term trends point to continuing growth: New-home sales in July were up 6.8 percent from the year-earlier period.