Housing Market Appears to be Stabilizing
Leave it to the National Association of Realtors to put a positive spin on housing sales. If you compare sales volume year over year instead of month over month, it is the worst February since 1998. The mortgage delinquency rate is nearly 6% and rising. Foreclosures are at a record high. Let us hope that the continuing decline in housing prices will attract enough bargain hunters to keep up with the rising tide of foreclosures.
The drop in the inventory of existing homes may not be the hopeful sign that Jim Haughey thinks. Homeowners may simply be withdrawing their homes from the market in the face of falling house prices. If that scenario is true, then builders of new homes are facing the same weak market conditions as ever. Never underestimate the ability of plunging prices to frighten off sellers.
February existing home sales are up 2.4% from December and February housing starts are 6.5% above December although both housing permits and new home sales are still declining early in 2008.