Washington, DC, September 27, 2005 -- Sales of new homes dropped sharply in August, falling by 9.9% to a seasonally adjusted annual rate of 1.24 million, according to the Commerce Department.
Economists had expected new home sales to decline to a 1.340 million unit pace from July's originally reported 1.410 million unit rate.
The supply of new homes on the market increased by 2.6% in August to 479,000, representing a five-month supply.
The August sales pace was 6.2 percent higher than a year earlier.
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.
