RSSHousing Market Appears to be Stabilizing
Today’s report from the National Association of Realtors that existing home sales moved up to a 5.03 million annual rate is further evidence that the bottom of the housing collapse may have been last December. Nonetheless, the bottom for the new single family market is still a few months ahead, as is the bottom for home prices.
This means that suppliers to housing market job sites should see a gradual turn to rising orders this spring.
The existing home market has been depressing the smaller new home market for more than a year. But this is easing as the inventory of existing homes for sale has dropped more than 10% since last summer. Bargain hunters bought homes at distressed prices. While speculators have made some of these purchases and immediately listed the home for rent, most are occupied by the buyers and no longer compete with homebuilders offering new homes for sale.
If the front end of the housing market has stabilized this winter, this is quicker than most forecasts anticipated. There will be less negative spillover on to the rest of construction and the broader economy than anticipated early this year. Never underestimate the ability of plunging prices to attract buyers.
Member Comments
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.
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.
