New home sales plummet in August

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By Martin Crutsinge ASSOCIATED PRESS

WASHINGTON (AP) -- Government data show sales of new homes dropped sharply in August, falling to the slowest pace in 17 years. The average sales price fell by the largest amount on record, too.

The Commerce Department said Thursday that new homes sales fell by 11.5 percent in August to a seasonally adjusted annual sales rate of 460,000 units, the slowest sales pace since January 1991.

It was a much bigger sales decline than the small 1 percent drop that economists had been expecting. The average price of a new home sold in August dropped by a record amount of 11.8 percent to $263,900, compared to the July average of $299,100. The median price was also down, falling 5.5 percent to $221,900.