Confidence among US homebuilders has hit a record low, as falling house prices and record sub-prime mortgage defaults continue to take their toll.
US homebuilders have taken to cutting prices
The National Association of Home Builders Housing Market Index fell two points to 18 in October, its lowest level since it started in 1985.
It was the eighth month in a row that the index, which has to pass 50 to show positive sentiment, has fallen.
The nationwide index has now been below 50 since May of last year.
'Some time yet'
Builder confidence continued to decline in October in all parts of the US except for the Midwest, which increased by two points.
The report was published as Treasury Secretary Henry Paulson said that the downturn in the housing market was likely to "continue to adversely impact our economy, our capital markets and many homeowners for some time yet".
US homebuilders are now continuing to lower prices as they struggle to find sufficient buyers.
"Many potential buyers are either holding out for even better deals or hesitating due to concerns about negative and confusing media reports on home values," said National Association of Home Builders president Brian Catalde.
"When the market is in proper balance, people can recognise a good deal when it comes along; at this point, they view a good deal as a moving target."
Analysts expect the US housing market to improve by the second half of next year.