Global Biz

US new home sales drop 3.6% in Sept

(Xinhua)
Updated: 2009-10-29 01:49

WASHINGTON: US new home sales dropped unexpectedly in September as the government's tax credit for first-time home buyers is about to expire, according to official data released Wednesday.

The Commerce Department said sales decreased 3.6 percent to a seasonally adjusted annual rate of 402,000 from the downwardly revised 417,000 in August, and slumped 7.8 percent from a year ago.

The September data were much lower than most economists' forecast of 440,000 units. It was also the first decline since March.

The median sales price in September was down 9.1 percent to $204,800 from $225,200 a year earlier.

Analysts said the housing market remained fragile, with the country's unemployment rate staying high and consumers reluctant to spend.

With the 8,000-dollar tax credit program for first-time home buyers to expire on November 30, home builders and economists are worried that house selling will plunge after the deadline, further hurting the recession-wracked real estate market.

The US Congress is considering extending the tax credit through March 2010 and gradually phasing it out over the rest of next year.