New figures show that sales of new US homes fell to a six-month low in August. The fourth straight monthly decline during the peak buying season in the US suggests the country's housing market is still far from a recovery.
The Commerce Department said new home sales fell 2.3% to a seasonally adjusted annual rate of 295,000. That is less than half the roughly 700,000 that economists say must be sold to sustain a healthy housing market.
New homes sales are on track for the worst year since the US government began keeping records a half century ago.
High unemployment, a requirement for larger deposit and tougher lending standards are preventing many people from buying homes. Plunging stock markets and a growing fear that the US could tip back into another recession are also keeping people from entering the housing market.
While new homes represent less than one-fifth of the housing market, they have a big impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
Last year was also the fifth straight year that sales have fallen. It followed five straight years of record highs, when housing was booming.
The median sales price of a new home fell nearly 9% to $209,100 - the lowest price since last October. That suggests builders are slashing their prices in order to compete with comparably lower-priced second-hand homes.
