For those homebuyers who are still waiting for better conditions, here's another miracle headed your way. Orders for durable goods are down 1.7 percent, says the Commerce Department.

What this means is that business spending is slowing down, a precursor to recession in the last eight cycles. Lower demand for machinery is the outcome of economic uncertainty that has caused banks to tighten credit. Consumers are starting to steer clear of big ticket items on the fear that we are already in a recession.

The news is sure to result in more job loss and a rise in unemployment claims. On the news, mortgage interest rates dipped lower to below six percent.

But if you're a homebuyer, you couldn't ask for a better report, except maybe this one -- sales of new homes fell to a 13-year low in February. That means that home buyers weren't tempted by near record interest rates or incentives. Keep in mind this figure is about contracts signed, not houses taken off the market. New home inventory is still at a 9.8-month supply, the highest amount since 1981.

What's interesting is where new home prices are. They dropped over the year by 2.7 percent to $244,100. There's still plenty of room for negotiation. Why?

Existing homes are selling better because they're cheaper. The median existing home was $195,900 in February, down 8.2 percent over last year. Clearly existing sellers are more negotiable.

Another thing hurting new homes is the bloat in McMansions, that many people now can't afford or qualify to buy. Inventories of standing luxury homes inched up two percent in February, while they fell in homes in conventional loan territory by over six percent.

Here's another reason why new home prices have to come down more -- history. Since 1989, new home prices have risen faster than existing home prices only seven times, but since 2004, they've been on a steamroll.

New homes were nearly 30 percent higher ($120,000 - median) than existing homes ($94,300 - median) in 1989, during the last major housing recession. By 2007, new home prices ($247,200 - median) were within 13 percent of existing home prices ($217,900 - median.)

In 2008, new homes were 25 percent higher in cost than existing homes, which suggests the gap is widening.

So let's recap. Home prices are still dropping, and are likely to drop further. Interest rates are likely to drop further. And housing inventories are still bloated, offering the best selection to consumers.

If you're a buyer, my question is -- what else could you possibly want?

Published: March 27, 2008

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.