New US Home Sales Edged Down 0.3 Percent in August

By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON (AP) - Sales of new homes in the United States dipped slightly in August from July but the median price of homes sold during the month rose by a record amount.

New-home sales edged down to a seasonally adjusted annual rate of 373,000 in August, a dip of 0.3 percent from July's revised rate of 374,000, the Commerce Department said Wednesday. That had been the fastest pace since April 2010 when government tax credits were boosting sales.

Sales in August were up 27.7 percent from the pace a year ago. But even with that gain, new-home sales remain well below the annual pace of 700,000 that economists consider healthy.

The median price of a new home jumped 11.2 percent in August to $256,900, the biggest one-month gain on record.

The housing market has been making a modest but steady recovery, helped by the Federal Reserve's efforts to give the economy a boost through lower interest rates. The Fed earlier this month announced a third round of bond buying in an effort to stimulate the economy and attack unemployment which has been stuck above 8 percent since early 2009.

Sales of previously occupied homes jumped in August to the highest level since May 2010. Builder confidence is at a six-year high and construction of single-family homes rose last month to the fastest annual rate in more than two years. However, even with the gains, home sales and construction remain well below healthy levels.

On Tuesday, the Standard & Poor's/Case Shiller home price index showed home prices increased 1.2 percent in July compared to July 2011. That was the second straight year-over-year price gain after two years when prices had fallen every month compared to the same month in the previous year.