New home prices take a plunge

WASHINGTON (AP) ? Is this what a housing bust looks like? New home prices fell last month by the largest amount in 35 years and owners are being warned to brace for further declines, especially in formerly hot markets.

After years of increases, some buyers say prices are still out of their range.

The Commerce Department reported that the median price for a new home sold in September was $217,100, a decline of 9.7 percent from September 2005.

That was the lowest median home price in two years and the sharpest year-over-year decline since December 1970, providing dramatic evidence of the slowdown in the once-booming housing market.

The median price is the middle point, where half sell for more and half sell for less.

The price decline for new homes followed a report Wednesday that prices in the much bigger existing home sales market also dropped on a year-over-year basis in September by 2.5 percent, the largest decline in records going back nearly four decades.

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WASHINGTON (AP) ? The economy has slowed to a snail’s pace, growing in the just-finished quarter at the slowest rate in more than three years and stirring fresh debate about the country’s financial health heading into the elections.

The Commerce Department reported Friday that economic growth during the July-to-September period clocked in at an annual rate of just 1.6 percent _ a subpar performance that mostly reflected the deepening housing slump. Investment in homebuilding was cut by the largest amount in 15 years.

The fresh reading on the economy, which fell short of the 2.1 percent pace analysts were forecasting, disappointed economists, rattled investors and gave Republicans and Democrats plenty to argue about.