Sales of new homes dropped 8.3 percent in August from July, pushing the projected annual rate of sales to the lowest level in seven years, the Associated Press reported. Sales are down to a seasonally adjusted annual rate of 795,000 units, the lowest level since June 2000.

The median sales price fell to $225,700, down 7.5 percent from a year earlier, the biggest percentage drop in 37 years.

Though sales in the South and West fell in August compared to the previous month, Midwest and Northeast sales increased.

A separate report from the Commerce Department showed that the economy grew at a 3.8 percent annual rate in the second quarter, down slightly from its previous estimate of 4 percent, but well above the 0.6 percent rate in the first quarter. The rebound came before a credit crisis caused fears about overall economic growth as people and businesses consider cutting back on spending and investment.