New home prices plunge
9.7% decline in September from last year's figure marks biggest drop in over 35 years
WASHINGTON -- New home prices fell last month by the largest amount in 35 years and owners are being warned to brace for further declines, especially in formerly hot markets.
But, after years of increases, some buyers say prices are still out of their range.
The Commerce Department reported the median price for a new home in September was $217,100, a decline of 9.7 percent from September 2005.
That was the lowest median price in two years and the sharpest year-over-year decline since December 1970, providing evidence of the slowdown in the once-booming housing market.
Median price is the midpoint, where half sell for more and half for less.
The price decline for new homes followed a report Wednesday that prices in the much bigger existing home sales market also dropped on a year-over-year basis in September by 2.5 percent, the largest decline in records going back nearly four decades.
The price decline for new homes in September came as the sales pace picked up, rising 5.3 percent to a seasonally adjusted annual rate 1.075 million homes.
Federal Reserve chairman Ben Bernanke has estimated the housing decline will cut growth by a percentage point in the second half of this year.