NEW YORK – New vehicle prices are falling at the fastest rate ever recorded, a team of analysts said Thursday, squeezing automakers' profit margins at a time of slumping sales but setting the stage for a sales rebound once the economy improves.

JPMorgan auto analyst Himanshu Patel and economic analyst Marc Levinson said in a research report that the average price of a new vehicle in the second quarter fell 2.3 percent from a year earlier to $25,632, citing government data. That's the steepest drop recorded in the bank's 41-year-old survey, the analysts said.

The price drop comes as automakers are already cope with mounting losses, declining sales and a shift away from high-margin trucks and sport utility vehicles toward lower-priced cars.

Although vehicle sales are expected to remain weak in the near term, the analysts said, the price decline is leading to better affordability and could translate into a big recovery for auto sales by the second half of 2009.

“If the labor market begins to improve in the second half of 2009 ... buyers returning to the vehicle market may find the costs of owning a new vehicle to be unusually attractive,” Patel and Levinson wrote.

The analysts attributed the decline in average price to two factors. First, demand among consumers has shifted from trucks to less-expensive cars due to the run-up in gas prices, they said. Truck-based vehicles like pickups, minivans and SUVs accounted for less than half of all sales in the second quarter for the first time since 2001, they said.

Second, consumers are trading down within both the car and light truck categories to cheaper, more fuel-efficient models overall, they said.

The result is that the average new vehicle now costs less than 40 percent of an average household's median annual income, the analysts said, whereas from 1991 to 2007, it would cost more than half of the median income.

“Vehicles have become much more affordable to average consumers,” they wrote.

The findings come a day after nearly every major automaker reported a drop in U.S. sales for August. Total U.S. auto sales fell 16 percent in August from a year ago and are down 11 percent so far this year.

Mark LaNeve, General Motors Corp.'s vice president of North American sales, said in a conference call Wednesday the automaker's average new vehicle price fell $300 to $400 year-over-year in August, though it rose $1,000 compared with July.

GM's August sales declined 20 percent but improved 31 percent over July's totals. Much of the gain came from GM's recent promotion offering employee discounts for everyone on many models.

“People were buying a richer mix of vehicles, and certainly we increased relative to ourselves in July and relative to the industry,” LaNeve said.

Ford Motor Co.'s August sales declined 27 percent, while Chrysler posted the biggest decline among the major automakers at 34 percent.