Prices for newly built American homes have suffered their largest drop year-on-year since 1970, according to data released yesterday, highlighting the dramatic nature of the downturn of the US housing sector. However, growing sales offered homebuilders some hope of recovery.

The median price of a new home fell to $217,100 (€172,000, £116,000) in September, 9.7 per cent lower than in the same month a year earlier. Average house prices fell 2.1 per cent, down from a growth rate of 6.4 per cent in August.