New home sales climb gradually as prices drop drastically

Sales of new U.S. homes in August climbed to nearly the highest level in a year, increasing 0.7 percent to a 429,000 annual pace, according to a new report from the Commerce Department. This statistic comes as median prices drop — August saw a 9.5 percent drop from July in the median home price, according to the data, as homes priced lower than $150,000 dominated the market. Ellen Zentner, a senior economist with Bank of Tokyo-Mitsubishi UFJ, said that any positive movement in the new home market is good news. “At least we continue to see an upward trend in place,” Zentner said. “New home sales are battling existing home sales prices, which are incredibly attractive with the foreclosure pricing.”