New home sales fell unexpectedly in July as buyers in the West pulled back sharply.
Sales of recently built single family homes in the U.S. dropped 2.4% from June to a seasonally adjusted annual rate of 412,000, the Commerce Department said Monday. Economists had expected an increase to a 428,000 rate, according to FactSet.
The South was the only region to see an increase, as new home sales climbed 8.1%. In the West, sales tumbled 15.2%.
Holding back sales is a low level of construction, said Jed Kolko, chief economist for real estate website Trulia. Although home building has been on the rise, it remains below historically normal levels.
“The 2014 building boom is in apartments,” Kolko tweeted following the report. “[You] can’t sell new homes if they’re not being built.”