Categorized | Finance and Mortgage

New Home Sales at Lowest Level in Months

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In what may be an indication of the struggles to come in the residential real estate market, recent reports indicate that overall sales have fallen to their lowest level in six months. The most recent decline is the fourth in as many months.

Investors and analysts worry that the latest numbers serve as a clear indication that the housing market is once again suffering a major setback on its road to recovery following the crash that took place roughly five years ago.

Even with unbelievably low interest mortgage loan rates, the number of sales of homes last month dipped to below three hundred thousand. The glut of new foreclosures, and overall declining prices has played a significant role in keeping away investors. Furthermore, the continuing struggles of the job market, very strict restrictions regarding mortgage loan lending, and decimated confidence among consumers have all kept most first-time homebuyers away from housing market as well.

While mortgage loan rates are expected to remain at great lows for perhaps another year, new home sales are expected to remain at incredibly low levels. The decline in demand has also led to further decreases in home prices. The median price of homes has dropped nearly five percent in the past year.

Amidst fears that the declining housing market is contributing to a potential double-dip recession, the Federal Reserve policy is taking action to rebuild the residential housing market. They have plans to buy a significant amount of bonds, and will reinvest mortgage debt in an attempt to improve the outlook of the housing market.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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