US News: "Is housing cooling off?"

US News and World Report makes some interesting points in a story this week about the cooling of the housing market.

According to the Commerce Department, the median price on new homes sold in June was $214,800. That's down from $227,400 in May and $237,300 in February. In other words, the average sales price of new homes has fallen nearly 10 percent since the first quarter.

Prices are even down from the same period last year, when the median price on a new home sold in June 2004 was $215,700...

The Commerce Department also reported this week that it now takes an average of 4.2 months after construction to sell new homes, up from 3.9 months in May and 3.6 months in July 2004. That's not a huge increase, but it shows that buyers are being more judicious.

Keep in mind that those are "new homes" and not existing homes. The benefit of looking at new homes is that there's a uniform threshold of quality. Existing homes vary so much that it's difficult to view their sales numbers as a gauge.