New home sales slump to six-month low

We just got new home sales figures for August, and they were nothing to write home about. Sales fell 2.3% to a seasonally adjusted annual rate of 295,000 from 302,000 a month earlier. That was roughly in line with the average forecast of analysts polled by Bloomberg.

The number of homes on the market continued to sink, hitting 162,000 last month. That's the lowest level in the history of the U.S., and roughly 6.6 months of supply at the current sales pace (in line with the last several months). Too bad it didn't do anything to support pricing - median home prices fell 7.7% on a yearly basis and 8.7% from a month earlier. At $209,100, new home prices are the lowest since last October.

A weakening economy, falling consumer confidence, and tighter credit standards are all weighing on housing demand. New home sales fell to a six-month low in August, with declines in three out of four regions of the country. Pricing was also weak, despite there being an extremely low level of new homes for sale. That's proof positive that competition from a glut of existing, "nearly new" homes is still weighing heavily on the market. Bottom line: The hunt for that elusive, long-lasting housing bottom continues!