Purchases of new homes drop 12.4 percent in July

Wednesday's news follows the announcement of a dismal 27.2 percent drop in existing home sales in July, as reported Tuesday by the National Association of Realtors. 

Home sales have sagged following the April 30 expiration of an up to $8,000 tax credit on purchases. The credit provided a boost in sales and in construction, but activity has dropped off since the tax credit ended. 

The National Association of Realtors said a soft sales pace is expected to continue for the next several months. If the economy can add jobs, the pace could pick up quickly.

Weak sales mean fewer jobs in the construction industry. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.