New home-sales figures show sales of existing homes falling in July, to the lowest level in two and a half years. The report from the National Association of Realtors shows the biggest declines occurring in the West and parts of the Midwest. Inventories -- or houses on the market, but not yet sold -- are up sharply.
Overall, sales are down 11 percent from a year ago. That decline in the number of sales has analysts concluding that some areas are in for major price declines in the months ahead.
"Sellers are refusing to bring their prices down," says economist David Lereah. "Buyers are just not nibbling, so sales are dropping dramatically all across the nation."
That impasse between buyers and sellers is what lead to a big increase in the number of homes on the market last month. Inventories of unsold homes climbed to a 7-month supply, meaning that it if homes continue selling at their current pace, it would take that long for demand to catch up.
Lereah says as a result, some sellers may have little choice but to bite the bullet and take less for their house.
For months, economists have debated whether the expected slow-down would conclude with a benign "soft landing" -- or a much more jarring touch-down that could throw the economy into recession.
On Wall Street, the news sent stocks lower. Shares of some big national homebuilders were especially hard hit. More developments are expected Thursday, when the federal government releases figures for new-home sales -- which most forecasters also expect to show a decline.
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