New US single-family home sales slumped to the slowest pace on record in July and orders for costly durable goods were weak, according to government reports today that heightened fears the economy was at risk of a new downturn.
The Commerce Department said single-family home sales plummeted 12.4% to a 276,000 unit annual rate from a downwardly revised rate of 315,000 in June.
The manufacturing sector, as well as the housing sector, appeared to be weakening, according to today's data.
The Commerce Department said new orders for long-lasting US manufactured goods excluding transportation equipment posted their largest decline in one and a half years in July while overall bookings rose far less than expected.
Weakness in home sales was exacerbated by the end of a popular housing tax credit for first-time buyers that had helped boost sales previously. The weak sales pace last month resulted in the supply of new homes available for sale spiking to 9.1 months' worth from 8 months' worth in June.
The number of new homes on the market was unchanged at 210,000 units. The average sale price for a new home fell last month from June to $204,000, the lowest since December 2003.
Separately, demand for home loans was moderate last week despite very low mortgage rates. Mortgage purchase and refinancing applications rose by less than 1% in the first week of August, even as 30-year loan rates fell to 4.57% - the lowest in 20 years - the Mortgage Bankers Association said.
Meanwhile, the durable goods orders report showed orders excluding transportation down 3.8% - the biggest monthly drop since January 2009 - after rising 0.2% in June.
Overall orders rose 0.3% following a revised 0.1% fall in June. Analysts had forecast orders increasing 2.8% last month from June's previously reported 1.2% fall. Orders excluding transportation had been forecast to increase 0.5% from a previously reported 0.9% fall.
Durable goods orders are a leading indicator of manufacturing and last month's moderate increase was the latest indication the sector that has been the main driver of the economy's recovery from the worst downturn since the Great Depression is losing some steam.
Overall orders last month were lifted by the volatile commercial aircraft component, which jumped 75.9% after a surprise 25.3% fall in June. The jump last month reflected 130 aircraft orders received from Boeing and probably included some of the 49 plane bookings in June.
Defence aircraft orders dropped 8.3% after rising 5.7% in June, while motor vehicle orders rose 5.3% after June's 4% rise.
Orders outside transportation were depressed by weak bookings for machinery, electrical equipment and computers and related products.
