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Housing bubble in more trouble

Washington -- In one more unmistakable sign that the air is leaking out of the nation's housing bubble at an accelerating ace, raising questions about a soft landing, all three segments of the housing market declined during July, and were off from year-ago levels at a double-digit pace.

Existing home sales, which account for more than two-thirds of all U.S. housing activity, dropped off by 4.1% from June levels. But when measured on a year-over-year basis, against July of 2005, the hit the housing sector is taking becomes even clearer -- over the past 12 months, sales have fallen by 11.2%.

Ditto housing starts. While starts declined by 2.5% from the month before, they're off by 13.3% from last year.

Hardest hit of all, sales of new homes declined by 4.3% from last month's levels, and have plunged by 21.6% from July 2005.

Finding a silver lining in the clouded outlook, David Lereah, chief economist of the National Association of Realtors said the current price stagnation is drawing buyers who'd been sitting on the sidelines. "Now sellers in many areas of the country are pricing to reflect current market realities. As a result, there could be some lift to home sales."

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