I was going to write something up, but Felix Salmon sums it all up best:
November is never a great month for home sales, but don't let that fool you: today's reports are truly gruesome, falling significantly short of very bearish expectations. New home sales, at an annualized rate of 407,000, are at their lowest level since 1991; existing home sales, which were running at a rate of over 7 million a year in 2005, are now down to less than 4.5 million.
The median home price in the US is now just $181,000 -- down from $215,000 as recently as June -- and total housing inventory for sale rose in months-supply terms (thanks to the drop in sales) and is now hitting all-time record levels of about one year's supply.
And here's the kicker:
All this is happening, remember, in an economy where roughly two-thirds of American households are owner-occupied. Owning one's own home, something which for most of this decade was a definite asset, is now a serious liability. Millions of workers can't move to somewhere with a better job market, and to make matters worse their net worth is now negative -- which means that no one will lend them any money, even if they are current on their mortgage payments.Source: NAR