New U.S. single-family home sales unexpectedly fell in July to set their slowest pace on record while prices were the lowest in more than 6-1/2 years, government data showed on Wednesday.

Sales of single-family homes in July fell 12.4 percent.

The Commerce Department said sales dropped 12.4 percent to a 276,000 unit annual rate, the lowest since the series started in 1963, from a downwardly revised 315,000 units in June.

Analysts polled by Reuters had forecast new home sales unchanged at a 330,000 unit pace last month.

‘What we are seeing is the downside of government intervention. It had fanned expectations of a market bottom when in fact, it created a false bottom,’ said Tom Porcelli, a senior economist at RBC Capital Markets in New York. ‘We expect home sales to stay at this remarkably low range with remarkably high unemployment. There is also little demand for lending.’

U.S. stocks briefly stumbled on the report, but recovered losses as investors seemed to shrug off yet another spate of negative housing data. U.S. Treasury debt prices added to gains, while the U.S. dollar [JPY=X 84.65 0.07 (+0.08%) ] erased gains against the yen.

The housing market has wobbled following the […]