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US New-Home Sales Slump for 4th Straight Month

Sales of new U.S. homes plunged 5.5 percent in September as the housing market cools with mortgage rates rising.

WASHINGTON (AP) — Sales of new U.S. homes plunged 5.5 percent in September, the fourth straight monthly drop as the housing market cools with mortgage rates rising.

The Commerce Department said Wednesday that newly built homes sold at a seasonally adjusted annual rate of 553,000 last month. The annual rate of home sales has dropped 15.3 percent since May.

Builders had assumed that a stronger economy would push up sales, yet a greater share of new construction is going unpurchased. There is a 7.1-month supply of new homes on the market, the highest level since .

Average 30-year mortgage rates have climbed to 4.85 percent, from 3.88 percent a year ago, according to mortgage buyer Freddie Mac.

The average sales price has slumped 0.6 percent from a year ago, to $377,200.