China's economy is getting worse as falling prices for new homes add to mounting alarms

• China's new-home prices fell for a second consecutive month and at a faster pace.
• In July prices across 70 cities dropped 0.23% compared to June, when they dipped 0.06%.

China's economic woes continue to mount, with the latest housing market data adding to the concern after earlier warnings on the consumer and manufacturing fronts.

The National Bureau of Statistics said Wednesday that prices for new homes across 70 cities declined 0.23% last month compared to the prior month. That follows June's 0.06% dip.

In July, 49 of the 70 cities measured in the data saw new-home values decline month over month, the most in 2023.

In Shenzhen, typically seen as a bellwether city, prices fell 0.9% in the secondary market to hover near levels seen last June during pandemic lockdowns.

Separate data from Bloomberg showed the value of residential sales nationwide dropped 43% to hit $90 billion in July, the weakest sales in a month in nearly six years.

The housing market data followed other signs that China's economy is weakening further. Industrial output rose 3.7% in July from a year ago, slowing from June's 4.4% pace. Retail sales growth cooled to 2.5% from 3.1%.

And consumer prices dropped annually in July for the first time in two years, joining producer prices in deflation territory.

China's property sector is especially key to its overall economic prospects.

"Housing prices are going down, so people aren't making purchases," Dexter Roberts, a senior fellow at the Atlantic Council, told Insider in a recent interview. "So much of people's wealth is tied up in the property sector, so when they see values go down, they decide to save for the future and not spend. The Chinese government won't be able to lift the property sector without that confidence."

Meanwhile, property developers like Country Garden — which used to be the country's largest developer by sales and is at risk of a debt default — are currently stuck in a market defined by slumping demand, weak buying activity, and downbeat consumer confidence.