New-home sales stall nationally and locally

Sales of new homes fell to a six-month low in August. The fourth straight monthly decline during the peak buying season suggests the housing market is years away from a recovery.

The Commerce Department said Monday that new-home sales fell 2.3 percent, to a seasonally adjusted annual rate of 295,000. That's less than half the roughly 700,000 that economists say must be sold to sustain a healthy housing market.

New-home sales are on pace for the worst year since the government began keeping records a half-century ago.

High unemployment, larger required down payments and tougher lending standards are said to be keeping many people from buying homes as are plunging stocks and a growing fear that the U.S. could tip back into another recession.

In line with the national trend, Las Vegas has seen new-home sales fall to the lowest level in more than 20 years, said Dennis Smith of Home Builders Research. He counted 381 new-home sales in August, compared with 316 in July. Homebuilders have averaged just fewer than 300 sales a month this year. Local new-home sales through August totaled 2,383, a 38 percent decrease from a year ago.

New-home closings have fallen from their peak of 38,957 in 2005 to 5,341 last year, Home Builders Research reported.

Pierre Ellis, an analyst at Decision Economics, said that until wages increase and hiring picks up, home sales will languish.

Although new homes represent less than one-fifth of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

Last year was also the fifth straight year that sales have fallen. It followed five straight years of record highs, when housing was booming.

Las Vegas continues to be plagued by a huge inventory of vacant homes, in the range of 65,000 to 70,000 units, RCG Economics principal John Restrepo said. The job market is extremely weak, producing only 11,000 jobs from January to August, he said.

"Most of these jobs were low-wage occupations, not exactly the primary homebuying group," Restrepo said. "Tight lending standards are not helping the situation, either, from the standpoint of homebuyers."

When the median resale price is averaging 55 percent of a new-home price, as it is in Las Vegas, you won't see a lot of new-home construction, Restrepo said. At fewer than 300 a month, new homes account for about 7 percent of total sales since the beginning of the year.

The median sales price of a new home fell nearly 9 percent, to $209,100 nationally -- the lowest price since last October. It's less than $200,000 in Las Vegas.

Las Vegas Review-Journal reporter Hubble Smith contributed to this report.