Sales of newly built single-family homes rose 2.4 percent to a seasonally-adjusted annual rate of 515,000 units in July, the Commerce Department reported Tuesday; sales for June were revised sharply downward to 503,000, from an originally-reported 530,000 last month. The July 2008 total reported today is 35 percent below the pace recorded one year ago. The new homes report also indicated that the inventory of new homes for sale declined for a fifteenth consecutive month in July to 416,000 units, the lowest number since April of 2007 -- the drop in inventory, 5.6 percent compared to last month, is the largest monthly drop in at least 40 years. The inventory reduction represented 10.1 months' supply at the current sales pace, down from 10.7 months in June. Economists had forecast new-home sales would drop to a 525,000 annual pace based on the 530,000 estimate originally provided for June, Bloomberg reported. "While the improvement in new-home sales in July is definitely a favorable development, it comes on the heels of two consecutive months of significant downward revisions to sales numbers for May and June, so we have to keep the latest report in perspective," said David Seiders, chief economist at the National Association of Home Builders. "Nevertheless, we are cautiously optimistic that home sales are approaching a bottom, and that the newly enacted first-time home buyer tax credit will help stimulate sales and provide crucial support for a market turnaround." On a regional basis, sales activity was mixed in July. The Northeast posted a nearly 39 percent gain, the West posted a 9.9 percent gain, the Midwest posted an 8.2 percent decline, and the South posted a 2.5 percent decline. Every region registered declines in the number of new homes for sale in July. Related links: New home sales report