High mortgage rates, rising construction costs and economic uncertainty continue to deter many potential home buyers during this summer season.

Sales of newly built single-family homes edged 0.6% lower in July, falling to a seasonally adjusted annual rate of 652,000 from an upwardly revised reading in June, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales is down 8.2% from a year earlier.

“Elevated mortgage rates and ongoing economic uncertainty are weighing heavily on buyer demand,” said Buddy Hughes, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Lexington, N.C. “Meanwhile, an elevated inventory of unsold homes, fueled by lagging sales, is prompting concerns over potential cutbacks in new construction.”

In July, 17% of new homes were priced below $300,000, while 31% were priced above $500,000.

“Affordability challenges continue to sideline many prospective home buyers,” said Jing Fu, NAHB senior director of forecasting and analysis. “The majority of new homes are now concentrated in the $300,000 to $500,000 price range, reflecting ongoing pressures from elevated interest rates, labor shortages, rising construction costs and inefficient regulatory costs.”

A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the July reading of 652,000 units is the number of homes that would sell if this pace continued for the next 12 months.

New single-family home inventory held steady at 499,000 residences marketed for sale as of July. This is 0.6% lower than the previous month, and 7.3% higher than a year ago. At the current sales pace, the months’ supply for new homes remained elevated at 9.2 compared to 7.9 a year ago. Completed, ready-to-occupy inventory stood at 121,000 homes in July, the highest level since 2009.

The median new home sale price was $403,800, down 5.9% from a year ago. The decline can be primarily attributed to home builders rising use of sales incentives.

Regionally, on a year-to-date basis, new home sales are down in all four regions, falling 23.1% in the Northeast, 4.2% in the Midwest, 1.4% in the South and 6.2% in the West.