More (Really) Bad News on the Home Sales Front
Just when you may have been thinking that U.S. sales of existing homes could not get any worse—they have. Even cynical economic forecasters were surprised by the seasonally-adjusted rate of 3.83 million reported today by the National Association of Realtors. That’s drop of 27.2% from June to July, more than twice the expected drop—and a 25.5% drop from July 2009.
The news comes during a week of stagnant economic reports, where unemployment refuses to budge and home buyers stayed home, despite the lowest mortgage rates ever and more reasonable housing prices than we’ve seen in some time.
Said Scott Brown, chief economist at Raymond James & Associates, as quoted in The Washington Post: “this is a pretty dicey time” for the U.S. economy. Another economist, Paul Dales, said the numbers “…suggest that without the housing tax credit, housing market activity is very, very weak (and) would eventually lead to a double dip in house prices.”
The federal tax credit helped existing home sales increase in the first part of the year, and when it was over, experts predicted that sales would decline, and then recover. Apparently the recovery has yet to begin—and it seems no region of the country is immune to the sagging sales numbers:
- Midwest -35%
- South -23%
- Northeast -30%
- West -25%
Looking for good news? Here’s a piece: home prices held up in July, up .7% from 2009. That trend, experts say, is not expected to continue. Foreclosures will continue to drag prices down and add to the oversupply of homes.
Landlords and property managers, hold tight: it’s likely your good tenants are not going to be moving into their own homes any time soon, and as foreclosures continue, more renters should be hitting the rental market.