Housing market cold as ice
By Melissa Wirkus
A few months ago, many people argued over the issue
of the slowing housing
market and apparent real estate bubble. Some did
not think that a slowdown was really occurring; but
my have times changed.
The fact that the housing market is cooling off from
its hot phase of a few years back is pretty much undeniable,
since the numbers show exactly that.
A September 5, 2006 article by Marcy Gordon of the Associated
Press, “National housing market cools,”
discusses how although home prices have continued to
rise we are sill in the midst of a housing slowdown.
“U.S. home
prices continued to rise in the second quarter but
showed the biggest slowdown in three decades, federal
regulators reported Tuesday. The figures released by
the Office of Federal Housing Enterprise Oversight,
the agency that oversees the big mortgage-finance companies
Fannie Mae and Freddie Mac, provided the latest indication
that the housing market is cooling substantially.”
“Average home prices rose 1.17 percent in the
April-June period, compared with 3.65 percent in the
second quarter of 2005 – the biggest decline in
price growth since OFHEO started keeping track of home
prices in 1975, the new report showed. The agency cited
higher interest rates and rising inventories of homes
for sale as possible factors in the slowdown in price
growth.”
More homes are on the market than ever before, so this
is causing a lot of complications in the real estate
world.
People are not that anxious to buy a home right now
because of a few things. First of all, there is such
a surplus that they do not need to be in a rush and
second, many are waiting for prices to fall so they
are holding off on any purchases
for the time being.
“Data issued last month provided proof that the
housing boom is over. The Commerce Department reported
that sales of new homes dropped in July by 4.3 percent,
the largest amount since February, while the inventory
of unsold homes climbed to a record high. And sales
of previously owned homes fell 4.1 percent in July to
a 2 1/2-year low, according to the National Association
of Realtors.”
“Sales of both new and existing homes set records
for five consecutive years as the housing industry enjoyed
a boom powered by the lowest mortgage rates in four
decades. But rates have been steadily rising this year
as the Federal Reserve tightens credit conditions as
a way to slow the economy and keep inflation under control.”
Experts are predicting that home prices will fall 10
percent by year’s end. Although most of the markets
saw home prices still increasing, there were some areas
that saw the opposite.
“Sales of both new and existing homes set records
for five consecutive years as the housing industry enjoyed
a boom powered by the lowest
mortgage rates in four decades. But rates have been
steadily rising this year as the Federal Reserve tightens
credit conditions as a way to slow the economy and keep
inflation under control.”