U.S. new home sales drop 12.4 percent in July

08:31, August 26, 2010      

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New home sales in the United States dropped 12.4 percent in July from a month earlier, the Commerce Department reported Wednesday.

Sales of new single-family houses in July were at a seasonally adjusted annual rate of 276,000, the slowest pace on records dating back to 1963, and 32.4 percent below the pace of the same period last year.

The median sales price of new homes sold in July was 204,000 dollars, down 4.8 percent from a year earlier and down 6 percent from June.

The new home sales report came one day after another report showed an unexpectedly sharp drop in existing home sales last month.

Existing home sales dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a month earlier, according to the National Association of Realtors (NAR). It was the largest monthly drop on records dating back to 1968.

The poor performances of the housing market in recent months were primarily due to the expiration of a government tax break at the end of April, under which new home buyers could take advantage of tax credits of up to 8,000 dollars.

Consumers jumped into the market before the deadline for the home buyer tax credit expired. Since May, however, contracts have been notably lower. Critics say the policy just altered the timing of some sales, and did nothing to change the fundamental supply and demand for housing.

Another report shows U.S. home prices rose modestly in the second quarter.

The Federal Housing Finance Agency (FHFA) said Wednesday its house price index was 0.9 percent higher on a seasonally adjusted basis in the second quarter than in a quarter earlier.

Source: Xinhua


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