New home sales sink again, Dow falls hard on news
The battered real estate and home building markets took another body blow Thursday as a government reading showed a bigger than expected drop in new home sales, and the nation's top builders posted large losses due to the weak market and took charges for the declining value of their holdings.
The news battered the overall stock market as it raised concerns that the crisis in home sales and building could be a bigger drag on the economy than previously expected. The Dow Jones industrial average was down as much as 322 points in midday trading.
New homes sold at an annual pace of 834,000 in the month, down 6.6 percent from the revised 893,000 rate in May. That left sales down 22.3 percent from year-ago levels.
Looks like we have not hit the bottom yet. Sales are still declining and foreclosure notice rates going up. Which means housing is going to be in bad shape for quite some time.
It is still unclear if it will cause a recession though. So far it has just been a drag on the market, but the rest of the market has managed to power through.
Jay
