Home sales jumped 9.6% in July 2009. We have a lot of experts out there looking at the latest housing data, many with different conclusions on what it means than the MSM.
My own feeling is home prices must come down to where the U.S. median income can afford a 30 year fixed mortgage and payments. Obviously that's too crude of an answer, to simply make owning a home affordable again, with investment, equity, wealth, jobs all wrapped up in the real estate market. So, with that, let's read some insightful writings.
Calculated Risk is the gold standard on housing market analysis.
The National Association of Realitors has released Q2 2009 home prices & sales survey results.
First the good news. Sales increased 3.8% from Q1 2009, although still down 2.9% from Q2 2008.
According to the report, each home sale creates $63k into the economy (let's verify this claim!)...
but oops, 36% of these sales were from distressed properties (i.e. foreclosed on homes). Stranger still, 30 yr. fixed mortgages dropped slightly in Q2, down 5.03% from 5.06%. Let's call that a flat line change from Q1 to Q2 2009.
Now for the bad news (or good news depending how you look at it). Median Home prices rose 4% from Q1 2009 to Q2 2009, but are still down 15.6% from Q2 2008.
With all of the main stream media economic recovery is here cheerleading rah rah, one would have expected consumer confidence to increase. But, guess what, it didn't.
All you have to do is click on any news aggregrator to see the new median home price for resales is $181,300 and new homes, median price is $220,400. Still not really affordable for your average U.S. median income, but a huge improvement.
That said, Bloomberg has the real story on this latest report. The rate at which prices are falling is a steep, steep decline. In fact, it's freefall.
Sales of single-family houses in the U.S. dropped in November by the most in two decades and resale prices collapsed at a pace reminiscent of the Great Depression, dashing speculation the market was close to a bottom.
The four-week [unemployment claims] moving average, which smooths out fluctuations, rose to 462,500. That's the highest it has been since Nov. 3, 2001.
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