Sales of newly built, single-family homes fell 2.4 percent to a seasonally adjusted annual rate of 412,000 units in July, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Sales numbers for June were revised up 16,000 to 422,000.

“Though new-home sales is a volatile metric that can fluctuate significantly from month to month, the economic fundamentals are in place for an ongoing housing recovery,” says National Association of Homebuilders (NAHB) chief economist David Crowe. “Consumer confidence continues to improve, mortgage rates are at yearly lows, and the labor market is healing. These factors should help spur pent-up demand.”

Regionally, new-home sales fell 30.8 percent in the Northeast, 8.8 percent in the Midwest, and 15.2 percent in the West. Sales were up 8.1 percent in the South, the country’s largest region.

The inventory of new homes for sale increased to 205,000 units in July. This is a 6.0-month supply at the current sales pace.