New home sales in the U.S. expectedly showed a modest decrease in the month of August, according to a report released by the Commerce Department on Wednesday, although the report also showed that home prices jumped to a five-year high.
The Commerce Department said new home sales edged down 0.3 percent to a seasonally adjusted annual rate of 373,000 in August from the revised July rate of 374,000.
Economists had expected new home sales to climb to an annual rate of 380,000 from the 372,000 rate originally reported for the previous month.
Despite the unexpected monthly decrease, the Commerce Department noted that new home sales are still up by 27.7 percent compared to August of 2011. The annual rate of sales also remains near the two-year high set in July.
The report also showed a notable increase in home prices, with the median sales price of new houses sold in August coming in at $256,900, up 11.2 percent from July and up 17 percent from the same month a year ago.
With the increase, the median sales price of new houses rose to its highest level since coming in at $262,600 in March of 2007.
Inventories of new homes for sale at the end of August were unchanged from the previous at 141,000. The number of new homes for sale represents 4.5 month of supply at the current sales rate.
The modest drop in new home sales in August was largely due to a 4.9 percent decrease in sales in the South, the nation's largest housing market.
On the other hand, new home sales in the Northeast surged up by 20 percent, while new home sales in the Midwest and the West rose by 1.8 percent and 0.9 percent, respectively.
Last Wednesday, the National Association of Realtors released a report showing that U.S. existing home sales rose by much more than expected in the month of August.
NAR said existing home sales jumped 7.8 percent to an annual rate of 4.82 million in August from 4.47 million in July. Economists had expected existing home sales to climb to an annual rate of 4.55 million.
With the bigger than expected monthly increase, existing home sales in August are up 9.3 percent from 4.41 million in the same month a year ago and are at their highest level since May of 2010.
Thursday morning, NAR is due to release a separate report on pending home sales in the month of August. Pending home sales are expected to rise by 0.3 percent after surging up by 2.4 percent in July.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
by RTT Staff Writer
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