Sales of new homes slumped 1.4 percent in August, the government reported. It was the sixth decline in eight months and more evidence of weakness in the housing industry.

The Commerce Department said new home sales totaled a seasonally adjusted annual rate of 550,000 after edging down a revised 0.2 percent in July. However, the July fall was much softer than the 2.3 percent first reported last month.Nevertheless, sales during the first eight months of the year have plunged 13.6 percent below the same period of 1989. Many analysts expect sales to remain weak because of high mortgage rates, consumer caution over adverse economic news and the gulf crisis and, in some areas, a glutted market.

Mortgage rates fell to 9.84 percent during the first week in August, according to the Federal Home Loan Mortgage Corp. But they began spiraling upward after the Aug. 2 Iraqi invasion of Kuwait and ended the month at 10.24 percent. They remained at 10.22 percent at the end of September.

The weak sales have contributed to sluggishness in the construction industry. The Commerce Department reported that overall spending was unchanged in August while residential spending fell 1.2 percent.

Sales of less-expensive existing homes, on the other hand, have been moving up for three months, including a 2.1 percent advance in August, according to surveys by the National Association of Realtors.

The Commerce Department said the median price of a new home edged up 0.2 percent to $120,200 in August. The Realtors said the median price of an existing home was $97,000. The median means half of the homes cost more, half less.