New Homes Sales Drop 0.6 Percent

By Martin Crutsinger

AP Economics Writer

July 25, 2008

CBNNews.com - WASHINGTON - Sales of new homes fell in June for the seventh time in the past eight months; more proof that the worst housing slump in decades is getting deeper.

The Commerce Department reported Friday that sales of new single-family homes dropped by 0.6 percent last month to a seasonally adjusted annual rate of 530,000 units following an even bigger 1.7 percent fall in May.

The decline was slightly smaller than had been expected and sales were revised up a bit for May. Even with those changes, new home sales are down by a sharp 33.2 percent from a year ago, however.

The nation is enduring a steep downturn in housing that has pushed the overall economy close to a recession. It has also triggered a severe credit crunch, forcing U.S. financial institutions to cope with billions of dollars of losses from bad mortgage loans.

A separate report Friday showed that the number of households facing the foreclosure process more than doubled in the second quarter compared to a year ago. Nationwide, 739,714 homes received at least one foreclosure-related notice during the quarter, or one in every 171 U.S. households, according to Irvine, Calif.-based RealtyTrac Inc.

The housing report showed that the median price of a new home sold in June fell by 2 percent compared to a year ago.

Sales were down the most in the South, a drop of 2 percent, with sales falling 0.9 percent in the West. These declines were offset somewhat by sales increases of 5.3 percent in the Northeast and 2.5 percent in the Midwest.

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