New home sales see historic drop

Homebuilders’ confidence, as measured by their leading trade organization, the National Association of Home Builders, is way down. Turns out, there’s good reason for this.

According to this report from the Associated Press, the sales of new homes dropped by a record amount in 2007, while sales prices had their weakest showing in 16 years. If that’s not enough to shake builder confidence, what is?

According to the AP story, sales of new homes dropped by 26.4 percent in 2007 t0 774,000. That is the highest year-to-year drop on record.

At the same time, the median selling price of a new home barely moved at all last year. New home prices inched up 0.2 percent in 2007 to $246,900.

Here’s more evidence, as if anyone really needed it, that our current housing slump is a serious one. Real estate professionals may be preaching that the slump is nearing its end. The evidence, though, doesn’t support this view.