WASHINGTON, Sept 25, 2008 (AFP) - US new home sales plunged 11.5 percent in in August despite a sharp drop in prices, government data showed Thursday, in fresh bad news for the battered real estate sector.

The Commerce Department reported that sales of new one-family homes stood at a seasonally adjusted annual rate of 460,000 units.

The August number was sharply lower than the consensus analyst forecast of 518,000 units and was 34.5 percent below the pace of August 2007.

The department upwardly revised the July sales pace to 520,000, from a prior estimate of 515,000.

The median sales price of new houses sold in August was 221,900 dollars, down from 263,900 a year ago, the department said.

The seasonally adjusted estimate of new houses for sale at the end of the month was 408,000, representing a 10.9-month supply at the current sales pace.

The government report on new home sales underscored the gloom over the US housing sector, struggling with the worst crisis in decades and a credit crisis that has squeezed frozen mortgage lending.

Existing home sales, a significantly larger market, fell 2.2 percent in August after two months of gains, the National Association of Realtors reported Wednesday.

However, new home sales data traditionally serves as a bellwether on the direction of the housing market because existing home sales numbers usually reflect a sales contract signed a month or two in advance.