The number of unsold homes rose to a 6.5-month supply at the July sales pace, the highest since November 1995, up 55% from a year earlier and the highest months’ supply since 1995. .

While month-over-month level of unsold new homes fell, the pace of decline over this time last year is much more dramatic at nearly 22 percent.  One aspect of the slowdown in new home sales may be that the inflation rate has slowed, making single-family homes a less attractive investment.  

A number of economists said the market for new homes may be in worse shape than the government’s figures show because they don’t take into account rising cancellations reported by many home builders in recent weeks. “This was probably an even weaker month than it looks,” says Michael Carliner, an economist with the National Association of Home Builders.