New-home sales fell 8.3% in August, Bloomberg reports, a greater decline than predicted. Housing prices fell over last year, with the 7.5% decrease the biggest drop since 1970. Sales fell to an annual pace of 795,000, lowest in seven years. And that may not signal the housing market’s nadir: One CEO said the industry won’t bottom out until late 2008.
A spike in defaults among subprime mortgage borrowers indirectly triggered the drop in new-home sales, as stricter lending requirements were written—and Americans found it more difficult to take out loans. "We see no signs that the housing market is stabilizing and believe it will be some time before a recovery begins," one executive said.