Sales of new homes posted the biggest increase in five months in August, raising hopes that the steep slide in the housing industry may be leveling off.

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Sales of new single-family homes increased by 4.1 percent last month to a seasonally adjusted annual rate of 1.05 million units, the Commerce Department reported Wednesday. It was the biggest increase since an 8 percent gain in March.

The August rise followed a 7.5 percent plunge in sales in July, which had registered the third straight decline.

The gain was far better than the 3 percent decline economists had been expecting and could signal that housing is beginning to level off after a steep slide. However, the price of homes sold in August fell to $237,000, down 1.3 percent from August 2005. It was the biggest year-over-year price decline in more than three years.

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