New Home Sales Miss Forecast

WASHINGTON (TheStreet) -- New home sales inched up slightly in August, proving yet again that the housing recovery will be far more of a zig-zag than a bee-line.

New home sales rose 0.7 during the month, according to the Commerce Department, but missed Wall Street's expectations.

Sales reached a seasonally adjusted annual rate of 429,000 from 426,000 in July. Economists expected a pace of 440,000.

This was the fifth straight increase, but sales were still down 4.3% on a year-over-year basis.

The median sales price tumbled 11.7% to $195,200 from $221,000 last year.

On Thursday, the National Association of Realtors said existing home sales slipped 2.7% in August.

Earlier today KB Home(KBH Quote) reported a narrower loss in its third quarter, and saw orders soar 62%.

But despite some good news, shares of the homebuilder led down the sector, tumbling 7.5% to $17.15 in morning trading.

After the release of the new-home sales report, shares of Lennar(LEN Quote) fell 1% to $14.66, Toll Brothers(TOL Quote) declined 1% to $19.97, Pulte Homes(PHM Quote) dropped 2.5% to $11.24 and MDC (MDC Quote) was off 1% to $35.35.

-- Reported by Jeanine Poggi in New York

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