While new home sales showed an increase in June (but a marked decrease in July), the Association of Realtors has revealed the dirty underbelly of those statistics, reports Bloomberg. Nobody understood why contracts to purchase were so low that month. Demand went down following the home buyer tax credit expired.
4 percent growth expected with existing home sales
A better forecast was expected in June 2010. The tax credit expired April 30, and it was very unexpected for there to be the 30 percent drop. Since 2001 when the median forecast started being kept, the 30 percent drop in May 2010 has been the largest reports Bloomberg.
Earn more with no $8,000 credit
The recession continues meaning high unemployment and raises in pay nonexistent. Treasury Secretary Tim Geithner thinks unemployment can be going up which means it will be hard to get a home still. Standard and Poor’s 500 went down 0.6 percent which doesn’t help stocks.
Existing home sales sell the most
90 percent of the housing market are sales of existing homes. Lawrence Yun, chief economist of the National Association of Realtors, told Bloomberg that “There might be a couple of additional months of slow home sales activity before picking up later within the year, provided the job market improves.”
The fear of homes being taken
Then you will find those pesky foreclosures. Mortgage rates are doing really well being down to 4.54 percent although there are already 38 percent more foreclosures than there were last year reports RealtyTrac, Inc. Donald Horton of home builder D.R. Horton Inc. remarked that market conditions have become quite challenging, and there is no urgent end in sight.
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Bloomberg
bloomberg.com/news/2010-08-03/pending-sales-of-existing-u-s-homes-unexpectedly-decreased-2-6-in-june.html
Homeowners who are staying put
youtube.com/watch?v=5c0oemzh-vU
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