Categorized | Residential

Is the Housing Market Facing Another False Bottom?

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According to the latest data analyzing the residential real estate market in the United States, there are some glaring signs that indicate that the market has finally hit its bottom. That is clearly welcome news. However, many economists are skeptical, and are questioning whether or not the market has, in fact, bottomed out.

 

The skepticism on behalf of the economists is very understandable. After all, the United States has been there before many times over the last few years. Rather than bottoming out each time prior, the market trend was simply in a paused state. It is for that reason that economists are quick to question, and even doubt that the market has truly reached its bottom.

 

Some economists do believe that the market has finally stabilized. The number of new homes that were sold during the month of March was up nearly eight percent in comparison to one year earlier. The median price also increased during the same time period. Housing inventory is down by almost twenty-five percent, and homes are selling at a faster clip than they have in recent years.

 

While those numbers are certainly positive, they do not tell the entire story. While they are up from one year ago, they actually represent a decline from previous months. That fact alone leaves investors weary of the health of the market.

 

If sales start to increase again month-over-month, the latest data projections may be true and the market may finally be on the rebound. Many economists, however, believe that it is important to see how well the market does once interest rates are increased in order to get the most accurate gauge on its overall health.

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About James Pattric

James writes for the Residential category (along with Josh Johnson) and also heads up the Resources category.

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