New-Home Sales Fell 2% In August
Single-family homes sold at a seasonally adjusted annual rate of 800,000, down from 818,000 in July, the Commerce Department said this week.</br></br>The August decline was somewhat larger than expected. Most economists had predicted a drop of less than 1 percent. Still, sales had risen 0.4 percent in July and 6.7 percent in June, and August marked the 20th consecutive month of sales above the 700,000 level, the longest such string since 1978-79.</br></br>During the first eight months of the year, sales ran 6 percent ahead of the same period of 1996. The supply of new homes for sale -- 284,000 in August -- was the slimmest in four years and was enough to last just 4.4 months at the current sales rate.</br></br>It's the eighth consecutive month that the nation had a new-home supply that would last less than five months, the longest stretch since 1971. That could be an incentive to builders to continue a healthy construction pace.</br></br>Economists said strong income and job growth have made buyers confident they can handle mortgage payments. And declining mortgage rates are making the payments more affordable.