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The New York Times has an article this morning about the recent housing data showing home sales and prices fell sharply once again in August. This only re-enforces what most of us have already accepted ... the housing crisis is still a long way from being over.During the month of August, new home sales dropped to the their slowest pace in the past seven years. Not really too surprising as this news seems to be the same every month lately. Sales of new homes dropped to an annual rate of 795,000 units. Prices on new homes were down a pretty remarkable 7.5% from the same period last year to "only" $225,700 as credit concerns and rising inventories continue to weigh down the market.
The drop in home prices is the steepest monthly decline the market has seen all the way back to December 1970 (before I was even born). With the current data continuing to prove what many of us already fear (things are getting worse), one has to really wonder just how bad things are going to get before they are able to stabilize and rebound.
One thing that we are all going to have to keep a close eye on in the months ahead is the foreclosure picture. Foreclosures have been ravishing homeowners across the country at an alarming rate lately, and that picture is set to only get worse. The main culprit in the foreclosure crisis is the high level of adjustable rate home loans that home buyers used to purchase their new homes over the past few year when the housing boom was in full effect.
Sorry to be the bearer of bad news, but for now things just don't seem likely to turn around any time soon.
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.
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