New home sales droop
August decline of close to 10%; report shows prices, home supply increase.
September 27, 2005: 10:10 AM EDT
WASHINGTON (Reuters) - Sales of new U.S. homes dropped a larger-than-expected 9.9 percent in August and the supply of homes for sale surged to a record high, but prices resumed their upward climb, a government report showed Tuesday.
The Commerce Department said new single-family home sales fell to a seasonally adjusted annual rate of 1.24 million units, the slowest pace since January, from a downwardly revised 1.37 million units in July. July's sales pace was a record.
The August sales pace was 6.2 percent higher than a year earlier.
Economists had expected new home sales to decline to a 1.34 million unit pace from July's originally reported 1.41 million unit rate.
The decline in sales, the sharpest drop since November, pushed the supply of homes on the market up to a record 479,000 at the end of August. At August's sale pace, that represented a 4.7 months' supply, the most since June 2000.
The median homes sales price rose for the first time in fourth months, hitting $220,300 -- off slightly from the start of the year.
Sales dropped in all four major regions of the country. They were off 22 percent in the Northeast, 17.9 percent in the West, 10.6 percent in the Midwest and 2.2 percent in the South.
While the report suggested some cooling in the red-hot U.S. housing market, it stood at odds with a report released Monday that showed sales of existing homes rose 2 percent in August to the second-highest level on record.