New Home Sales Fall 11.5% to Lowest Level Since January 1991

Adding to a slew of poor data from the U.S. on Thursday, new home sales in the U.S. fell much more than anticipated, dropping 11.5% in August to an annual pace of 460k, down from an upwardly revised pace of 520k in the prior month, according to the Commerce Department.

The month-over-month decline marks the largest drop since November 2007, pushing the pace of sales to the slowest rate since January 1991.

July's pace of sales was revised up 5k to 520k. Economists were expecting August data to fall just 1.0% to 510k.

The median sale price of new houses fell 5.5% to its lowest level since November 2004, dropping to $221,900, down from $234,900 in July.

The overhang of supply rose to a 10.9-month supply, up from July's upwardly revised 10.3-month supply, which was originally reported at 10.1 months.

The Census report follows the existing home sales report from the National Association of Realtors on Wednesday, which fell by 2.2%, more than anticipated, to a pace of 4.91 million sales.

By Patrick McGee and edited by Stephen Huebl
©CEP News Ltd. 2008