WASHINGTON U.S. sales of new single-family homes fell 3% in August, adding to the evidence that the economy is expanding at a slower pace.
The decline, to an annual rate of 893,000 units, was registered in all regions, the Commerce Department said. It was the fourth month in five that home sales fell below an annual rate of 900,000 units.
Housing has plateaued, said Daniel Laufenberg, chief economist at American Express Corp. in Minneapolis.
The Conference Board also reported that its index of leading economic indicators fell 0.1% in August, for the third decline in four months. The index is considered a gauge of economic performance over the next three to six months.
Sales of new homes account for about 15% of all houses on the market. Analysts watch the numbers to help gauge consumer demand and economic growth. Spending on housing construction accounts for about 4% of the nations output, and purchases of furniture and appliances stimulate growth further.
Tuesdays statistics put new home sales on track to finish the year at 889,000 units, down from a record 907,000 last year but up from 886,000 in 1998.
Sales dropped in all regions, led by a 6% decline in the West, to an annual rate of 236,000 units. Sales fell 1.6% in the Midwest, to 182,000, 2.4% in the South, to 408,000, and 1.5% in the Northeast, to 66,000.
Those declines caused the median price of a new home to fall 0.7% in August, to $165,000. The supply of new homes for sale grew to 4.1 months supply, from 3.9 months in July.
While consumer optimism, near a record high, has buoyed sales, job creation has slowed, wage growth has moderated, and the stock market has stayed sluggish. That helps explain why recent declines in mortgage rates are unlikely to propel new home sales past last years record.
Ryland Group Inc., a homebuilding and mortgage finance company, said it expects to sell a record number of homes, which would boost this years per-share earnings above analyst estimates.