Earlier this week, the U.S. Department of Commerce released figures showing new home sales in the United States rose 9.4% in August. The media was "dancing in the street," as usual, with this news, reporting the jump in new home sales as another indicator that the U.S. economy continues to march happily and blissfully along.

But the percentage increase in new home sales was not the number I was interested in. I was looking for another number: the average price of a new home in August compared to July. Most news reports didn't even mention that number. If you looked hard enough, you could find it buried in the U.S. Department of Commerce release.

In August, the median price of a new home sold in the U.S. was $208,900, down $5,500, or 2.6%, from July 2004. In essence, we had higher sales volume in units, but lower prices. In the stock market, when we see strong volume but falling prices, we call this "distribution." While I can't relate stock market indicators to real estate, I have a real gut feeling home prices are easing.

As a sometimes passive, sometimes active, real estate investor and avid realty market follower, I can tell you the luxury home market is starting to see a glut. In the town I live in, last year at this time there were 32 homes listed on the MLS at a price of over $800,000. This morning, there are 53 such listings. It's taking much longer to move homes in the luxury, high-end market. And with the median price of new homes also declining, the general feel from agents is "the market is not as robust as it used to be." Personally, I believe the market is finally starting to ease.

Is it the higher interest rates causing the softness? I don't think so, at least not yet. If anything, you would think consumers that had been putting off the move would rush to buy a home if the belief was that higher rates lie ahead. Ultimately, depending on how high Greenspan moves interest rates, higher rates will cool the housing market.

But with the U.S. consumer personal savings rate falling to a record low of 0.6% in July, as I have written about before, American consumers are simply tapped out. And I don't believe we'll see just how rough it can get for the typical consumer until after the election is over.