How does this housing market downturn measure up?

Good morning and happy 2008! I hope everyone had a wonderful New Year's holiday. I'm working on a lot of things, one of which is a comparison between this housing market slump and past downturns. I don't think it's any surprise that the numbers back up my contention that this has been one of the worst drops on record.

Take the above chart of new home sales. It goes back to the early 1960s. You can see that sales have collapsed 53% from their July 2005 peak of 1.389 million units. That's worse than the '94-'95 drop (about 31%) and the '89-'91 downturn (-45%). It also tops the 42% decline we saw in '65-'66 and the 51% fall we experienced in '72-'74.

The only downturn we've experienced in modern history that was worse than this one was the '78-'81 collapse. Sales plunged 61% as surging inflation, a bond market collapse, and drastic Federal Reserve rate hikes caused 30-year mortgage rates to double from 9% to 18%. New home sales would have to slump to an annual rate of around 540,000 to match that decline.