Americans cut back sharply in July on their purchases of new homes, a sign that higher mortgage rates may slow the housing recovery.
Sales of newly built homes dropped 13.4 percent to a seasonally adjusted annual rate of 394,000, the Commerce Department said Friday. That was the lowest in nine months. And sales fell from a rate of 455,000 in June, which was revised down from a previously reported 497,000.
The housing rebound that began last year has helped drive economic growth and create more construction jobs. But mortgage rates have climbed a full percentage point since May. The increase has begun to steal some momentum from the market.