Don’t look now, but the housing bubble may be about to pop.
Sales of new homes plunged in August by the largest amount in nine months as the nation’s housing industry continued to flash mixed signals about whether the boom is starting to fade.
The Commerce Department reported that new home sales declined by 9.9 percent last month to a seasonally adjusted annual rate 1.24 million units.
Consumer confidence also plummeted as Americans woke up and realized George Bush is their president.
In other economic news, the Conference Board in New York reported that consumer confidence plunged in September to a reading of 86.6, down from the August level of 105.5.
It marked the lowest level for consumer confidence in nearly two years, since October 2003. Various consumer confidence measures have shown sharp drops recently, reflecting the surge in energy prices including gasoline that topped $3 per gallon right after Hurricane Katrina shut down Gulf Coast refineries.
The 9.9 percent decline in new home sales was more than double what analysts had been expecting. The government also revised the July sales pace lower to an annual rate of 1.37 million units, still a 5.3 percent increase from June.
The decline in sales in August was the biggest drop since a 10 percent fall in November 2004.