Cumulative declines in single-family construction and building permit authorizations is approaching 50 percent, said David Seiders, chief economist for the National Association of Home Builders.

He also said annual rates for both starts and building permits fell below the million-unit market for the first time since 1995.

The NAHB/Wells Fargo Housing Market Index dropped to the lowest level this month in its 22-year history and has fallen for eight consecutive months.

The index score was 18 for this month. A score of less than 50 indicates that more builders view sales conditions as poor than good.

“Inventories of new homes for sale are hardly off their 2006 highs and the months’ supply actually has moved up to a cyclical high,” Seiders stated in the report. The month’s supply of new homes for sale reached 8.2 in August, based on the sales rate for that month – even as builders drastically cut plans for additional new home starts.

Builders have reported some success in cutting prices to boost sales, according to the report.

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One possible bright note is that continued price declines will affect consumer spending, which should encourage the Federal Reserve to ease monetary policy this year.