If you believe, like I do, that stock price charts are an indication of what's headed our way, you'll want to take a serious look at the Dow Jones Home Construction Index. This index, comprised of the stocks of the largest homebuilders in the United States, started to plunge in mid-2005 and is down 68% in last two years.

Most startling, the Dow Jones Home Construction Index now trades at the same level it did in early 2003. Is the index telling us prices of new homes will fall to the same as 2003? I believe so.

Yesterday, the U.S. Commerce Department reported housing starts for September were at their lowest level in 14 years. Building permits fell more than seven percent in September.

Remember the National Association of Realtors? They were the group that placed full-page ads in national newspapers in November 2006 telling consumers "right now may actually be one of the best times to buy a home." The same group just slashed its forecast for home sales... for the 10th time this year!

Foreclosures of U.S. homes doubled in September 2007 from September 2006. Foreclosures just put more homes back on the market increasing inventory. It's my opinion that foreclosures of homes in the U.S. will double again in September 2008 from last month's high figure.

Maybe the National Association of Realtors should place a new ad in national newspapers. Maybe the heading this time should be the truth:

"Now may be one of the worst times in American history to buy a home because lower prices are headed your way."