In August, US new home sales fell for a fourth straight month, in line with expectations. New home sales dropped by 2.3% M/M to a total level of 295 000, marginally above the consensus estimate of 293 000. The details show that new home sales fell in the Northeast (-13.6% M/M), West (-6.3% M/M) and South (-2.4% M/M), while they rose in the Midwest (8.2% M/M). The number of new homes for sale fell from 164 000 to 162 000, while months’ supply increased from 6.5 to 6.6. Both median ($209 100 from $228 900) and average ($246 000 from $269 500) prices dropped significantly in August. Weakness was mainly based in the Northeast as record high levels of rainfall and flooding late hit part of the country late in the month due to the Hurricane Irene. Beside this weather factor, new home sales are stuck at record low levels as mortgage rates are low and the prices of new homes are still elevated compared to existing homes, including many distressed properties. These factors will continue to weigh in the coming months and therefore the outlook remains bleak.