This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Falling Home Prices Fail to Spur Buying

NEW YORK (TheStreet) -- Falling home prices aren't enticing Americans to buy up new property.

The government's latest read on new-home sales in September came in a little better than expectations, but offered no reason to get excited about a rebound in the housing sector. The report reflected a troubling trend that Americans are reluctant to invest in new homes amid a weak economic backdrop.

New Homes

New home sales jumped 5.7% to 313,000 from a revised 296,000 in August, according to the Commerce Department. The consensus estimate was for 300,000 units, according to Reuters.

However, as BTIG Economics notes: "It is worth reminding people though that at their peak, new home sales were running north of 1.3 million."

BTIG also points out that median prices dropped by 3% in September, marking the third straight month that prices have slipped. On a year-to-year basis, the decline is even more apparent -- home prices have plunged more than 10%.

Americans remain reluctant to invest in property given the high level of unemployment in the economy. Furthermore, sellers of new homes continue to compete with a glut of foreclosed homes and cheaper prices on the market.

BTIG concludes that lower mortgage rates have failed to spur the housing sector. "The cost of money does not matter," writes the research firm. "If 30-year mortgage rates of 4% or less is not enough to spur housing activity, one must wonder what will?"

"It is hard to get optimism right now about this sector," writes David Semmens, U.S. economist with Standard Chartered Bank, in a research note. "Mortgage lending remains weak and consumers are cautious; hardly the recipe for a housing comeback."

Despite the larger troubling trend, investors received the government report well. The dollar gained some traction against the yen and stocks moved slightly higher after the government's report.

-- Written by Chao Deng in New York.

>To contact the writer of this article, click here: Chao Deng.

>To follow the writer on Twitter, go to: @chao_deng

>To submit a news tip, send an email to: tips@thestreet.com.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs