24 Aug 2011

New home sales down in US again

7:32 am on 24 August 2011

Sales of new homes in the United States fell for the third consecutive month in July.

The Commerce Department said sales fell 0.7% in July to a seasonally adjusted annual rate of 298,000, from a revised 300,000 in June,.

The new figures were worse than analysts had expected. They represent a five-month low.

The BBC reports high unemployment and a weak house 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.

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 creates an average of three jobs and $US90,000 in taxes.