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Last Updated: Monday, 25 September 2006, 14:59 GMT 15:59 UK
US house prices decline in August
Existing home for sale in Denver
The US housing market is continuing to cool
The price of existing US homes has shown its first annual decline in more than 11 years, a report has shown.

In the latest sign of a housing slowdown, the study found that the average cost of an existing property fell to $225,000 (119,000) in August.

This was 1.7% below the price seen in August 2005, and the first annual decline since April 1995.

The National Association of Realtors survey said sales of existing US homes fell 0.5% in August from a year before.

Sales in August totalled 6.3 million properties. However, this was better than market expectations of a decline to 6.2 million.

Price 'adjustment'

David Lereah, chief economist for the National Association of Realtors, said the market was cooling rather than collapsing.

"It keeps us on track to see the third-highest sales year on record, but we do expect an adjustment in home prices to last several months as we work through a build up in the inventory of homes on the market," he said.

The drop in existing home sales comes after a report said last week that construction of new homes and apartments dropped by 6% in August.

This pushed building activity to its lowest level since 2003.

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