U.S. new home sales dropped unexpectedly in September as the government's tax credit for first-time home buyers is about to expire, according to official data released Wednesday.
The Commerce Department said sales decreased 3.6 percent to a seasonally adjusted annual rate of 402,000 from the downwardly revised 417,000 in August, and slumped 7.8 percent from a year ago.
The September data were much lower than most economists' forecast of 440,000 units. It was also the first decline since March.
The median sales price in September was down 9.1 percent to 204,800 U.S. dollars from 225,200 a year earlier.
Analysts said the housing market remained fragile, with the country's unemployment rate staying high and consumers reluctant to spend.
With the 8,000-dollar tax credit program for first-time home buyers to expire on Nov. 30, home builders and economists are worried that house selling will plunge after the deadline, further hurting the recession-wracked real-estate market.
The U.S. Congress is considering extending the tax credit through March 2010 and gradually phasing it out over the rest of next year.
U.S. orders for durable goods slightly rebounded in September, a positive sign for the manufacturing sector, according to government data released Wednesday.
The Commerce Department said new orders for manufactured durable goods expected to last at least three years rose 1.0 percent in September, matching economists' expectations.
September's rise in orders followed a 2.6 percent decline in August and a 4.8 percent surge in July.
A 7.9 percent rise in orders for machinery, the best showing since an 8.5 percent surge in March 2008, led the overall increase.
Excluding the transportation sector, where orders can vary widely from month to month, new orders rose 0.9 percent in September after a 0.4 percent fall in August.
Although the manufacturing sector has shown signs of recovery, many economists are worried that demand could falter in the months ahead as various government stimulus programs expire.