Housing market cold as ice
A few months ago, many people argued over the issue of the slowing housing market and apparent real estate bubble. Some did not think that a slowdown was really occurring; but my have times changed.
The fact that the housing market is cooling off from its hot phase of a few years back is pretty much undeniable, since the numbers show exactly that.
A September 5, 2006 article by Marcy Gordon of the Associated Press, “National housing market cools,” discusses how although home prices have continued to rise we are sill in the midst of a housing slowdown.
“U.S. home prices continued to rise in the second quarter but showed the biggest slowdown in three decades, federal regulators reported Tuesday. The figures released by the Office of Federal Housing Enterprise Oversight, the agency that oversees the big mortgage-finance companies Fannie Mae and Freddie Mac, provided the latest indication that the housing market is cooling substantially.”
“Average home prices rose 1.17 percent in the April-June period, compared with 3.65 percent in the second quarter of 2005 – the biggest decline in price growth since OFHEO started keeping track of home prices in 1975, the new report showed. The agency cited higher interest rates and rising inventories of homes for sale as possible factors in the slowdown in price growth.”
More homes are on the market than ever before, so this is causing a lot of complications in the real estate world.
People are not that anxious to buy a home right now because of a few things. First of all, there is such a surplus that they do not need to be in a rush and second, many are waiting for prices to fall so they are holding off on any purchases for the time being.
“Data issued last month provided proof that the housing boom is over. The Commerce Department reported that sales of new homes dropped in July by 4.3 percent, the largest amount since February, while the inventory of unsold homes climbed to a record high. And sales of previously owned homes fell 4.1 percent in July to a 2 1/2-year low, according to the National Association of Realtors.”
“Sales of both new and existing homes set records for five consecutive years as the housing industry enjoyed a boom powered by the lowest mortgage rates in four decades. But rates have been steadily rising this year as the Federal Reserve tightens credit conditions as a way to slow the economy and keep inflation under control.”
Experts are predicting that home prices will fall 10 percent by year’s end. Although most of the markets saw home prices still increasing, there were some areas that saw the opposite.
“Sales of both new and existing homes set records for five consecutive years as the housing industry enjoyed a boom powered by the lowest mortgage rates in four decades. But rates have been steadily rising this year as the Federal Reserve tightens credit conditions as a way to slow the economy and keep inflation under control.”