Big housing blow: New home sales fall, again

[dustup]

• Tweet

Big housing blow: New home sales fall, again

WASHINGTON – Sales of new U.S. homes fell to a six-month low in August. The fourth straight monthly decline during the peak buying season suggests the housing market is years away from a recovery.

    An open house sign near new homes in the Blackstone development in Brea, Calif.

    By Chris Carlson, AP

    An open house sign near new homes in the Blackstone development in Brea, Calif.

Enlarge

By Chris Carlson, AP

An open house sign near new homes in the Blackstone development in Brea, Calif.
 
The Commerce Department said Monday that new-home sales fell 2.3% 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.

While new homes represent less than one-fifth of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
more here:http://www.usatoday.com/money/economy/housing/story/2011-09-26/new-home-sales-fall/50553098/1

[ivanm]

Given the incredible number of used houses for sale in hot areas like the Dallas/ Fort Worth multiplex, it is no wonder new houses are not selling well.
You can buy a very nice house there for around 230k where not so long ago it would have gone for 260 to 280k.

People have bought off on the idea that their personal home is an investment, and that worked for decades, but now that the downturn has wrecked the housing market they are seeing the folly of their greed and short sightedness. People need to get used to the idea that a house is a shelter and not a status symbol.  The fallacy of seeing a personal dwelling as an investment is that you must sell it and move in order to get your equity from it, or trade up.
Becaues of that idiocy people are too often house poor.