Homebuyers are paying more and fewer new single-family homes are being bought in the U.S., Reuters reported.
New home sales fell 9.4 percent to a seasonally adjusted annual rate of 571,000 units in July, the Commerce Department said Wednesday. That's the lowest level since December 2016.
"The third-quarter sales data are starting out significantly below the second-quarter average, and many other housing reports have also shown some recent weakening in their respective trends," Daniel Silver, an economist at JPMorgan in New York, told Reuters. "(Wednesday's) report strengthens our conviction that real residential investment will decline in the third quarter."
The nearly 10 percent drop, the largest since August 2016, dashed the expectations of economists, who looked forward to a 0.3 percent gain, Reuters reported.
Plus, a surge in those who think it's a bad time for homebuying was seen in a Fannie Mae survey last month. There was also a decrease in people who said now is a good time to buy a home, Reuters reported.
Even with a drop in home sales, the housing market is still bolstered by an enduring labor market, Reuters reported, though surging prices due to a shortage of homes on the market is weighing it down.
Reuters reported that the median price of a new home increased 6.3 percent in July from a year ago to $313,700.
Meanwhile, home improvement retailers are reporting increases in net sales, in part thanks to homeowners deciding to remodel instead of upgrading, Reuters reported.