New single family home sales rose a modest 1.7% last month to 728,00 but the prior month's figures were revised down to the point where so far this year, new home sales are down by nearly one third. Sales during the latest three months were 45.3% below the peak hit in the middle of 2005.

In the West, sales fell 15.7% last month to a new low and reversed all of a downwardly revised gain in September. Sales out West are down by more than one third this year and they are down by two thirds from the 2005 peak. Sales in the Northeast ticked up 1.8% and they have moved erratically sideways this year. Sales in the Midwest posted a 14.2 m/m gain but are off by one third since year end 2006. Sales in the South also rose 6.8% m/m but are down one quarter this year.

All this weakness in sales has done nothing for prices and they fell another 8.6% last month. The decline left prices down 17.1% from the peak earlier this year.

The number of homes for sale continued down another 2.3% last month and the supply of homes is off a moderate 3.6% this year. However, at the current low sales rate, the months' supply of homes on the market is 8.5, down slightly from September but still double the rate for all of 2005.