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US new home sales slid 12.8% in July

FILE - In this June 13, 2019, file photo stacks of building materials are stacked up near new home under construction in Mechanicsville, Va. On Friday, Aug. 23, the Commerce Department reports on sales of new homes in July. (AP Photo/Steve Helber, File)

WASHINGTON — Sales of new U.S. homes fell a sharp 12.8% in July as higher prices and limited inventory sidelined would-be buyers.

The Commerce Department says that new homes sold at a seasonally adjusted annual rate of 635,000 units, down from a revised June rate of 728,000. So far this year, sales have risen just 4.1%.

A shortage of available homes, worsened by a construction slowdown, has pushed up prices and made purchases less affordable for Americans. Land and labour shortages continue to slow down builders, prolonging the housing shortage.

As a consequence, even lower borrowing costs have so far failed to induce more sales.

The median sales price fell to $312,800. That is down 4.5% from a year ago, but marks the highest level since April.

Bani Sapra, The Associated Press