New-Home Sales Skid 8.3% To Slowest Rate in 7 Years

AP

Sales of new single-family U.S. homes fell 8.3 percent in August to a 795,000 annual sales pace, its slowest rate in over seven years, while the inventory of homes dropped, a Commerce Department report showed Thursday.

Analysts polled by Reuters were expecting August sales to fall to an annual rate of 830,000 from July's previously reported rate of 870,000, which was revised to 867,000. The August sales pace was the slowest since a 793,000 rate in June 2000.

Some analysts blamed new, tough mortgage standards for part of the sales decline.

"A lot of people who were close to making deals or actually in contract to buy found it more difficult to get financing," said Michael Bizenov, president of Sterling National Mortgage,
Sterling Bancorp in New York.

In August, the median sales price of a new home fell 8.3 percent to $225,700, the lowest since January 2005. The 7.5 percent price drop from a year ago was the sharpest since
December 1970.

There were 529,000 new homes for sale in August, a 1.5 percent drop from July. It would take 8.2 months to clear that inventory at the current sales pace, up from the 7.6 months reported in July.

Sales through August are down 21.3 percent from the same period a year ago.

Longer-dated U.S. Treasury debt prices rose after the steeper-than-expected drop in August new home sales data while  stocks pared gains.

The data came two days after a report showing the sales of existing homes falling sharply in August.

Total existing homes sales fell 4.3 percent in August to an annual rate of 5.5 million units from July. Home resales represent 85 percent of the housing market.