Sales of new family homes in the US fell 8.3% in August to its slowest rate in more than seven years, a Commerce Department report has shown.
New home sales fell to an annual pace of 795,000 – from July’s 867,000 – worse than analysts had been expecting.
The average sales price of a new home also fell 8.3%, to $225,700 (£111,500) – the lowest since January 2005.
Analysts say that such weak data will give the US Federal Reserve more reasons to cut interest rates again.
The Commerce Department also said that there were 529,000 new homes for sale in August, a 1.5% drop from July.
It would take 8.2 months to sell those properties at the current sales pace, the department said, up from the 7.6 months reported in July.
Analysts say that tight credit conditions – making it harder for people to get mortgages – are continuing to dent the market for house sales, which is already weak.
The housing slowdown and decline in credit availability have triggered worries that the economy could go into a recession – a worry which was behind the Fed’s move to cut interest rates from 5.25% to 4.75% earlier this month.
Source: BBC.co.uk