Big drop in new home sales in August

U.S. (new) home sales fell 11.5% to a 17-year low in August, the Commerce Department estimated Thursday. The decline in new-home sales to a seasonally adjusted annual rate of 460,000 was much weaker than the 505,000 pace expected by economists surveyed by MarketWatch. Economists are wondering how far the housing market can fall. There are few signs of a bottom in the data. New-home sales are down 34.5% compared with a year ago. The months’ supply of homes on the market rose to 10.9 months from 10.3 months in July. Median sales prices have fallen 6.2% in the past year to $221,900.

It was a much bigger sales decline than the small 1% drop that economists had been expecting. The average price of a new home sold in August dropped by a record amount of 11.8% to $263,900, compared with the July average of $299,100. The median price was also down, falling 5.5% to $221,900.