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August was another bad month for new-home sales, with increased concerns aboutfinancial instability in Europe just one of many headwinds that dragged sales down to the lowest monthly pace since February.

The U.S. Census Bureau reported Monday that new-home sales in August decreased 2.3 percent from 302,000 units in July to 295,000 units, annualized. NAFCU Chief Economist Tun Wai noted that it was the fourth consecutive monthly decline. "Given the degree of uncertainty in the financial marketplace, especially concerns about potential defaults in Greece and Italy, it's not surprising that even qualified consumers are choosing to hold off on buying a new home," Wai said.

New-home sales in three of the four housing regions in August declined, with sales in the Northeast falling 13.6 percent, the West falling 6.3 percent and the South dropping 2.4 percent. The Midwest, which is "increasingly looking to be the healthiest housing region," said Wai, reported an 8.2 percent monthly increase.

On a year-over-year basis, new-home sales were up 6.1 percent. Two of the four regions, the Midwest and the South, reported gains in their year-over-year numbers of 65.6 percent and 9.3 percent, respectively. The Northeast reported a decrease of 36.7 percent from a year ago, while the West reported a 10.6 percent decline.

The inventory level in August rose from July's level of 6.5 months of supply to 6.6 months. At the same time, the number of unsold homes left on the market declined from 164,000 units in July to 162,000 units in August and was down 21.4 percent on a year-ago basis.

The median new-home price, non-seasonally adjusted, fell 8.65 percent from $228,900 in July to $209,100 in August and was down 7.7 percent from a year ago. "Mortgage rates are still hovering near record lows, but that fact is not resonating with buyers that continue to stand on the sidelines," Wai said.

With the Federal Reserve's acknowledgement that a low-interest rate environment is required until at least mid-2013, a strong rebound in the housing market does not appear to be on the immediate horizon. "Not only is the glut of cheap, existing homes on the market making competition tough, the volatility in the financial markets, ongoing Eurozone troubles and congressional bickering over the debt ceiling continue to create more uncertainty, ultimately scaring off potential new-home buyers."

"In short," Wai added, "credit unions shouldn't be holding their breath for a healthy new-home sales market."