Home, Home I'm Deranged Part 12

New home sales posted another dismal month for August, the second worst month on record and the median home price has now dropped to December 2003 levels and falling.

The Commerce Department says last month's new home sales were unchanged from a month earlier at a seasonally adjusted annual sales pace of 288,000.

Sales were down by 29 percent from the same month a year earlier. 

The only time sales were slower was in May, when the sales pace was 282,000, the worst on records dating back to 1963. July's results had been the worst on record, but were adjusted upward. 

High unemployment, tight credit and uncertainty about home prices have kept people from buying homes. Government tax credits boosted the market earlier in the year, but those expired in April. 

Data this week showed home construction rose last month and sales of previously owned homes crawled off 13-year lows. But activity in the sector, which contributed to the worst recession since the Great Depression, remains subdued amid a 9.6 percent unemployment rate. 

 

The number of new homes available for sale fell 1.4 percent to 206,000 units, the lowest since August 1968. 

Despite August's unchanged sales pace, the supply of new homes on the market dipped to 8.6 months' worth from 8.7 months' worth in July.

That last part is the sign that the housing market is really disintegrating.   New home building is drying up...it has to.  There's so much supply of housing on the market that there's nowhere for the new homes being built to go.  And there's still nearly 9 months of supply of just new homes on the market.

It's fundamentally broken, and it's in turn breaking down before our eyes.  The next several months are going to be really hideous for the economy I think.