Despite a slight increase in new home sales for the month of August, Wall Street had more expectations from the housing market. Nationally, home sales last month posted only a slight gain of 0.7 percent which shows that the housing market recovery still remains fragile.
Even though the increase was minimal it still marked the fifth consecutive monthly gain and it's the strongest report in close to a year. Compared to this time last year sales were only down 4.3 percent and sales have jumped over 30 percent from this past January when the housing market hit rock bottom.
The National Association of Realtors reported Thursday that previously occupied homes sales dropped slightly by 2.7 percent last month.
Still, economist's feel that despite Augusts' weak housing report both new home sales and previously occupied homes sales should remain on an upward trend.
In an effort to continue to sell new homes builders continue to make deep cuts in prices to bring in buyers.
New home sales in August were down more than 3 percent from the previous month and at the current sales pace builders have eased back construction to the point that supply and demand are close to being balanced.
Even with the price cutting happening with new homes it's still taking almost a year to sell new homes that are currently on the market.
On the other side of the coin, buyers continue to try and take advantage of the federal tax credit that covers 10 percent of the home price up to $8,000 for first-time owners.
Currently, real estate agents and builders are putting pressure on Congress to extend the credit for one more year.
Sales have varied nationally and the best performing area was the West, where home sales grew almost 13 percent.