New home sales fall: Recovery years away
It might have been unexpected but nobody is bothering to notice any more.
New home sales sank 2.3% in August - a six month low. The median price fell 9%. As the Washington Post notes, this means that recovery is almost certainly years away.
The Commerce Department said Monday that new-home sales fell 2.3 percent 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-homes 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.
Pierre Ellis, an analyst at Decision Economics, said that until wages increase and hiring picks up, home sales will languish.
The "bad news is the evident absence of optimism that sales will pick up to any degree," Ellis said.
And here's a little something to cheer you up:
Home prices have dropped more since the recession started, on a percentage basis, than during the Great Depression of the 1930s. It took 19 years for prices to fully recover after the Depression.
No bottom in sight yet.