Andrew Torgan
CNN

New home sales posted a modest 0.7% increase in August, missing Wall Street expectations and providing more evidence that the housing market recovery remains tentative.

Sales inched up to a seasonally-adjusted annual rate of 429,000 from a downwardly revised 426,000 in July. And even though it was the fifth straight increase, sales were down more than 3% from the same month last year.

New home sales don’t make up quite as much of the market as existing home sales, which we learned Thursday fell nearly 3% in August. But analysts still watch them very closely, because they typically cost more than previously-owned homes.

As for where homes are selling, sales in the West jumped by 12.1% to 120,000 homes, from 107,000 in July. Activity in the South stayed flat at 224,000 units. The Northeast saw new home sales plunge 16.3% to 36,000, from 43,000 the previous month. Midwestern sales also fell, by 5.8% to 49,000.

The median sales price of new homes fell significantly, to $195,200, from a revised $215,600 in July. The average price sank to $256,800 in August from $273,100.

Along those lines, an analyst at Goldman Sachs is forecasting that new home sales may jump 30% next year, buoyed by low mortgage rates and a “greater than 50% probability” that Congress will extend a tax credit for first-time buyers.

The analyst’s report says new home sales in California will lead the pack as property values increase.

More Americans staying put

Americans have tamed their wanderlust during this recession, according to the latest data released by the Census Bureau. Only about 2.4% of Americans moved from state to state in 2008, down from 2.5% the previous year.

"The mobility rate is lower than it has been in years," said Robert Lang, a demographer with Virginia Tech University. "There's a recession and a housing bust. People can't sell their homes in California and move to Las Vegas or sell their condo in Florida and move to North Carolina."

"People are hunkering down, trying to hold on to what they have," added Andy Beveridge, a demographer and sociology professor at Queens College in New York. "It's a depression, recession mentality."

Plus, a good portion of the population has reached the age where the charm of a new place is more than offset by the fetters of life and responsibilities. "A large share of the population is at the age where they're settled," Lang said. "The baby boomers have good jobs and most are not ready to retire."

Durable goods orders drop

New orders for big-ticket manufactured items like cars and refrigerators fell unexpectedly in August, dropping by their biggest margin in seven months, due mainly to a plunge in commercial aircraft orders as well as a drop in auto sales.

Durable goods orders slipped 2.4% in August after a 4.8% increase in July. Economists were expecting a slight increase. Excluding auto sales, orders showed a negligible decline.

July's overall durable goods gain was mostly the result of auto sales sparked by the government’s “Cash for Clunkers” program.

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