Business

US new home sales fall again in August

New homes for sale in Davie, Florida
Image caption New-home sales make up one-fifth of US housing transactions

US new home sales fell for the fourth month a row in August, figures have shown, indicating continuing weakness in the housing market.

Sales fell 2.3% in August to a seasonally adjusted annual rate of 295,000, the Commerce Department said.

The new figures are less than half the 700,000 figure experts say must be built to sustain a healthy market, and represent a six-month low.

High unemployment and a weak housing market are undermining the US recovery.

An oversupply of used homes and a large stock of foreclosed housing is also putting a strain on the market.

"The oversupply of existing homes on the market is discouraging home builders from building new homes so sales of new homes are still very depressed and prices are still sliding," said analyst Gary Thayer of Wells Fargo Advisors in Saint Louis.

"There's no sign yet that low mortgage rates are helping the housing sector. We've recently seen a slight increase in mortgage refinancing, but mortgage applications to purchase homes still look pretty weak."

Pierre Ellis, an analyst at Decision Economics in New York, said that until wages and job hiring numbers increased, home sales would remain sluggish.

The "bad news is the evident absence of optimism that sales will pick up to any degree," he added.

New homes represent less than one-fifth of the housing market, but have a large impact on the economy.

According to the National Association of Home Builders each new-build creates an average of three jobs and $90,000 in taxes.

The only glimmer of hope was that July's sales figure was upgraded to an annual rate of 302,000 units from the previously reported 298,000.

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