New homes sales decline at Record lows

Another monthly decline in sales of new homes has prompted a fresh round of worrying and despair in the United States real estate market.

New home sales in August fell for the fourth straight month to 295,000, according to the Department of Commerce, a six-month low and a pace that is likely to be the "worst year since the Government started keeping half a century ago," by the Associated Press.

2.3% Monthly sales drop last month was accompanied by a decrease of 9 per cent of the median new home prices, which fell to $ 209,100, a low of 11 months.

Analysts and the media are rather gloomy about the signs of such data. For example:

"The housing sector cannot get any worse," says Michael Englund, Economist at action economics in Boulder, Colorado, as quoted in an article by Reuters. "[Real estate] market is dead, and the record low mortgage rates do nothing to help, "said Ian Shepherdson, Chief U.S. economist at high frequency Economics as quoted in the Wall Street Journal."Sales are very weak, and there will be a very small improvement in the next two months. We expect a step up in distressed home sales, which will put more downward pressure on prices. It will be very slow return to normality, "said Celia Chen, a housing Economist at Moody's Analytics Inc. 's in West Chester, Pennsylvania as quoted in BusinessWeek."House prices fell the most since the recession started, on a percentage basis, during the great depression of the 1930s. It took 19 years to fully recover after the depression of prices, "said a commentator from the Associated Press.

On the positive, home builders are at least answering the question that fall in an appropriate manner. Total new home inventory in August fell also on bass.

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