The housing market made some gains in the past several months, but there still may be a notable amount of work ahead to reach recovery.

Total new single-family home sales were at 412,000 units during July, 2.4 percent lower than June's figure of 422,000 units, a report from the Department of Commerce explained.

"We are somewhat surprised by this dip, considering builder confidence and new-home starts are on the rise," said Kevin Kelly, chairman of NAHB and a home builder and developer from Wilmington, Delaware. "However, builders are increasing their level of inventory in anticipation that sales will gradually improve during the rest of the year."

Despite the decline, the figure was still improved from a year earlier. The report showed that the latest measurement was more than 12 percent higher than July 2013, when the rate reached 367,000 units.

"Though new-home sales is a volatile metric that can fluctuate significantly from month to month, the economic fundamentals are in place for an ongoing housing recovery," said David Crowe, chief economist at NAHB. "Consumer confidence continues to improve, mortgage rates are at yearly lows, and the labor market is healing. These factors should help spur pent-up demand."

The overall inventory level for the residential market remained solid during the month. The report noted that the overall rate of homes for sale in the category was 205,000 units, which meant the figure was at 6 months of supply considering the sales rate.

Prices also were competitive in July, as the average price was $339,100, while the median reached $269,800, the report added.

Mortgage rates fall again
While home sales experienced a decline, there may still be some reason for individuals to be optimistic, especially with a potential for mortgage affordability.

The 30-year fixed-rate mortgage fell to 4.1 percent during the week ending Aug. 21, 2014, slightly lower than a week earlier, when it was 4.12 percent, according to a report from Freddie Mac.

"Mortgage rates were down slightly this week, following the decline in 10-year Treasury yields," said Frank Nothaft, vice president and chief economist at Freddie Mac. "Meanwhile, housing starts in July jumped 15.7 percent to 1.093 million units after falling 4.0 percent a month earlier. Also, July's consumer prices increased at a 0.1 percent seasonally adjusted pace, the slowest in five months."

The 15-year FRM also declined, slipping to 3.23 percent from the previous level of 3.24 percent, the report added.