On Wednesday, the Commerce Department reported that the annual sale rate of new homes has decreased significantly. In July, the rate went down by 12.4%, which is almost 276,000 units lower ever since the government started keeping records of houses in 1963.

The sales of new houses are noted at the starting of the home-buying process when a purchaser signs buying agreement papers.

The housing market has been showing weak results from April 30 when the federal tax credit of around $8,000 buyers were ended. However, the drop in new home sales in July was more as compared to experts’ expectations.

In addition to the drop of new and existing homes sales, mortgage applications have also gone down by 43% in the last days of April and early July, with the expiration of the tax credit.

Michael Fratantoni, a Vice President at the Mortgage Bankers Association, says that the data indicates that the real estate sector is unlikely to recover in near future and it might take some time.

According to Toll Brothers, who are the luxury house builders, only a few house buyers have signed the purchase contract even though a significant profit was generated in the last quarter of July.