Sales of new homes tumbled 6 percent in September to the lowest level in nearly eight years, the government said this week. Analysts saw little hope of improvement soon.
Sales totaled a seasonally adjusted annual rate of 503,000 last month, the Commerce Department and the Housing and Urban Development Department said in a joint report.
That was the lowest level since October 1982. September marked the ninth drop in 12 months and the steepest decline since March. Sales had fallen 1.8 percent in August and 0.9 percent in July.
"There are a lot of bad things going on that make people unwilling to make the commitment to buy a home," said economist Richard Peach of the Mortgage Bankers Association of America.
"We've got an increasing unemployment rate. We've got plunging consumer confidence because of the Mideast crisis and now we've got increases in taxes" in the budget passed last Sunday, he said.
He predicted sales would remain slow through mid-1991.
During the first nine months of the year, 435,000 new homes were sold, down 15 percent from the same period of 1989.
Though weak sales are hurting home builders, they are helping home buyers.
The median price of a new home dropped to $115,000 in September, meaning half the homes sold cost more and half cost less. That was down from $118,400 in August and $120,000 a year earlier.