August New Home Sales Slide, Prices Climb

Last month's adjusted annual sales pace missed forecasts

By Christopher Freeburn, InvestorPlace Writer

The Commerce Department announced on Wednesday that new home sales in the U.S. edged down 0.3% in August, while prices jumped to a five-year high.

New homes sold last month at a seasonally adjusted rate of 373,000 units. That fell short of the 380,000-unit annual sales pace forecast by economists, Reuters noted.

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The government revised the previously stated seasonally-adjusted annual sales rate for July up from 372,000 units, to 374,000 units.

Still, new homes sales in August rose 27.7% over the same period last year.

While the sales pace slackened last month, prices soared. Buyers of new homes paid a median $256,900 in August, up 11.2%. That marked the largest monthly rise since March 2007.

In a year-over-year comparison, the median price of a new home climbed 17% over August 2011. That was the sharpest yearly increase since December 2004.

Rising home prices signaled increasing strength in the U.S. housing market, analysts said.

The good news on new home prices did nothing to help home-builder stocks. Shares of Toll Brothers (NYSE:TOL) fell more than 3% in Wednesday trading, while D.R. Horton (NYSE:DHI) shares dropped almost 5% and Ryland (NYSE:RYL) shares tumbled more than 5%.

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