WASHINGTON - October 28, 2009 - The number of buyers snapping up new homes dipped unexpectedly last month as the effects of a temporary tax credit for first-time owners started to wear off.

The 3.6% drop in September's new home sales, reported by the Commerce Department on Wednesday, was the first decline since March and a distinct sign of weakness in a market that had rebounded strongly over the summer.

The report surprised Wall Street. Stocks fell Wednesday with the Dow Jones industrial average off 36.88 to 9,845.29 in midday trading. Homebuilder stocks also tumbled with Hovnanian Enterprises leading the way with a 9% drop, or 38 cents, to $3.92.