The biggest plunge in new home prices in 37 years was not enough to revive October sales, according to the government's latest reading on the battered housing and home building markets.This report tells you that home prices have a lot more to fall. Even with the steepest price drop in 37 years, people are still not buying. Where is the bottom in this market and how much of the economy will it take down with it?
The sales pace for October was well short of economists' forecasts. The Census Bureau's latest report also sharply cut back on its earlier estimates for sales in August and September, when a meltdown in mortgage markets kept many potential buyers from getting the financing they needed.
Also depressing sales and prices was a record 191,000 completed new homes on the market that have not yet been sold.
Consumer debt is at an all time high and the affordability index at an all time low. Together this is a toxic mix for the housing market. Fear will keep even those who can afford a home on the sidelines while this all shakes out. The economic worries for 2008 seem to grow by the day.
Next year should be so much fun.