Washington, DC, September 27, 2006-- Sales of new homes increased 4.1% in August to a seasonally adjusted annual rate of 1.05 million from a three-year low in July, the Commerce Department reported Wednesday.
It was the first increase in new-home sales since March.
Sales are down 17.4% in the past year and are down 23% from the peak last July.
Sales in May, June and July were revised sharply lower. July's sales pace was revised to 1.009 million, the lowest since March 2003, from an earlier 1.072 million.
Economists were expecting sales to fall about 3.4% in August to a seasonally adjusted annual rate of 1.036 million. The August result is about 1.4% higher than expected.
The supply of unsold homes dropped 0.4% to 568,000, representing a 6.6-month supply at the August rate from 7.0 months in July.
The median sales price of a new home fell 1.3% year-on-year to $237,000, the first year-on-year decline since 2003. The sales price does not reflect the massive incentives builders have been offering to close deals.
Earlier in the week, the National Association of Realtors reported that the median price of an existing home fell year-over-year for the first time in 11 years.
Despite the sales increase in August, there's little reason for near-term optimism about new home sales, economists said.
Regionally, sales rose 21.7% in the Northeast, 12.2% in the Midwest, and 11.1% in the South. Sales dropped 17.7% in the West to the lowest level since November 2001.
