New Home Sales Fall to Lowest Since 1991

From CNN:

August sales came in at a seasonally adjusted annual rate of 460,000, the Census Bureau report showed, down 11.5% from a revised 520,000 in July. The reading was well below the consensus forecast of 513,000, according to economists surveyed by Briefing.com.

The rate of sales was down 24.5% from a year earlier. Sales were at their lowest pace since January 1991, when the first Gulf War started, and the economy was near the bottom of a recession and undergoing an oil price shock. ...

Sales fell as prices continued to drop. The median price of a new home sold in August was $221,900, down 5.5% from $234,900 in July and down 6.2% from $236,500 a year earlier. Prices for new homes on the market were at their lowest level since September 2004.

This decline probably doesn't accurately capture the weakness in prices for new homes, as about three out of four builders have reported having to pay buyers' closing costs or offer other incentives such as expensive features for free in order to maintain sales.

Prices have been driven down by the glut of new homes on the market.

The report showed 166,000 completed new homes available at the end of the month, bringing total inventory — including new homes under construction and not yet started — to a seasonally adjusted 408,000, equal to 10.9-month supply. That's up from a 10.3 month supply in July.