WASHINGTON (Reuters) -Sales of new U.S. single-family homes fell in July following a sharp upward revision to the prior month's sales pace, and the overall trend remained consistent with a housing market struggling in an environment of high mortgage rates.

New home sale units dropped 0.6% to a seasonally adjusted annualized rate of 652,000 units last month, the Commerce Department's Census Bureau said on Monday. The sales pace for June was upgraded to a rate of 656,000 units from the previously reported pace of 627,000 units.

Economists polled by Reuters had forecast new home sales, which make up more than 10% of U.S. home sales, would rise to a rate of 630,000 units. New home sales, which are counted at the signing of a contract, are volatile on a month-to-month basis and subject to big revisions.

They decreased 8.2% on a year-over-year basis in July.