Sales of newly built U.S. single-family homes slipped 0.6% in July to a seasonally adjusted annual rate of 652,000, the Commerce Department said. Despite the monthly decline, the figure topped economists’ 630,000 estimate after June’s pace was revised up to 656,000, offering a mixed picture of demand in a market still contending with high borrowing costs. The median price for a new house fell to $403,800, down 5.9% from a year earlier and $3,400 below June, as builders stepped up discounts and mortgage-rate buydowns to lure hesitant buyers. Public filings show incentive spending at major builders such as Lennar has risen to more than 13% of revenue, while the average size of a new home has shrunk to 2,404 square feet, the smallest in two decades. Supply remains elevated even after recent pullbacks in construction: 499,000 new homes were available in July, equal to 9.2 months of sales at the current pace. Roughly 15% of purchase agreements were reported to have fallen through during the month, and the share of first-time buyers has dropped to a record low, underscoring the squeeze from mortgage rates still near 6.6%. Economists expect residential investment to stay weak through year-end, although a stronger June revision prompted some forecasters to lift third-quarter GDP trackers to around 1.6%. With the Federal Reserve weighing a possible rate cut in September, analysts say any sustained recovery in housing will hinge on a broader improvement in affordability and labor-market confidence.