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US new homes sales fell 0.7 percent in September

U.S. new home sales fell slightly in September with all regions of the country except the Midwest showing declines.

The Commerce Department reported Thursday that sales of new homes fell 0.7 percent last month following a big 6.2 percent surge in sales in August. Homes were sold at a seasonally adjusted annual rate of 701,000, 15.5 percent higher than a year ago.

Many economists had expected sales to keep rising in September, reflecting declining mortgage rates and ultra-low unemployment.

However, the housing industry is combating a variety of factors that are holding back growth ranging from a shortage of construction workers to a lack of available land for new homes.

The median price of a new home fell 7.9 percent last month to $299,400, down from an August price of $325,200.

The only region to post a sales gain was the Midwest where sales rose 6.3 percent. Sales in the West fell 3.8 percent and were down 2.8 percent in the Northeast and a slight 0.2 percent in the South.

The National Association of Realtors reported Wednesday that sales of previously owned homes , the biggest part of the market, fell 2.2 percent in September with rising prices and lower inventories blamed for the decline.

Homeowners in both the existing sales market and the new market have had to face a shortage of available properties this year, especially at the lower-priced end of the market.

The inventory of new homes for sale fell 0.6 percent September to 321,000, or a 5.5-months supply at the September sales pace.

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