New-home sales were down more than 17 percent in the second quarter, and sales of pre-owned homes were off 15 percent in June. The biggest drop in new-home sales was in homes below $150,000.

“What we are seeing more than anything is the impact of the tightening of the subprime market,” Mr. Brown said. “Some of those buyers probably shouldn’t be buying.”

During the first half of 2007, the median sales price of pre-owned homes was up 1 percent from a year earlier to $150,000, primarily because fewer low-cost homes were changing hands.

Builders started 8,568 single-family homes in the quarter — down almost 40 percent from a year earlier, according to statistics by housing analyst Metrostudy Inc. Builders sold 9,774 homes in the just-completed quarter — the lowest total in more than two years.

With the cutback in construction, the number of unsold new homes in the area has declined to just under 11,000. About 13,000 single-family homes were under construction in North Texas, compared with about 18,000 a year ago, according to Metrostudy.

The supply of homes for sale is down from same time last year’s eight months to about seven months.

Source: The Dallas Morning News