Moreover, the demand for housing appears to be weakening further amid credit conditions for home mortgage lending that are generally tighter, but especially so in the subprime segment. Sales of existing single-family homes in July were more than 20 percent below their peak in mid-2005, while sales of new homes in July were more than 37 percent below their peak.
Although housing starts have also moved down over the past year, the decline thus far has lagged the downturn in sales, and the backlog of unsold new homes has climbed to a very high level relative to sales.