Sales of new homes fell to a six-month low in August and marked the fourth consecutive monthly decline during the peak buying season, suggesting the housing market is years away from a recovery. The Commerce Department reports today new-home sales fell 2.3% to a seasonally adjusted annual rate of 295,000. That’s less than half the roughly 700,000 that economists say must be sold to sustain a healthy housing market. New-home sales are on pace for the worst year since the government began keeping records a half century ago. High unemployment, larger required down payments and tougher lending standards are preventing many people from buying homes. Plunging stocks and a growing fear that the U.S. could tip back into another recession are also keeping people from entering the housing market. While new homes represent less than one-fifth of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders. Last year was also the fifth straight year that sales have fallen. It followed five straight years of record highs, when housing was booming. The median sales price of a new home fell nearly 9% to $209,100, the lowest price since last October. That suggests builders are slashing their prices in order to compete with comparably lower-priced previously occupied homes.
Today’s poll question: When do you expect the housing market to finally begin rebounding?
