New Home Sales Grinding To Halt

"This report is yet another example of how the housing sector is suffering the effects of the financial meltdown and extreme tightening of consumer and business credit," Sandy Dunn, president of the National Association of Home Builders (NAHB) and a home builder from Point Pleasant, W.Va., said while attending the association's board of directors meeting in San Diego.

"Now is the time for Congress to come together in a bipartisan fashion to pass a financial rescue plan that stabilizes financial markets and gets at the root problems of declining home values and rising foreclosures. This legislation will help shore up home values and unfreeze credit lines, two moves that are absolutely essential to get the economy moving again," Dunn added.

"The major downshift in new-home sales in August reflected a weakening economy and job market as well as tight mortgage credit market conditions," said NAHB Chief Economist Dave Seiders. "And this occurred well before the most recent round of financial market turmoil, accentuating the urgent need for immediate action on the Administration's financial rescue plan."

The good news looking forward is that both Democrats and Republicans in Congress believe that a $700 billion mortgage bailout could be agreed upon by the end of the weekend. "I'm convinced that by Sunday we will have an agreement that people can understand on this bill," predicted Massachusetts Democratic Representative Barney Frank.

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