Across the nation, home sales are plummeting and builders are slowing new building as account of unsold homes continues to stockpile. The tax toll that had provided a boost to the market expired at April's end. Single-family housing starts in June fell to a seasonally adjusted annual rate of 455,000, as compared with 1.47 million housing starts in the Us in 2006, the year before the housing urgency began.
Indicators of time to come building is bleak, as well, as new permits for single-family starts fell in June for the third month in a row. The reasons for the the markets struggles are varied, from poor stock performance, to slowly recovering labor markets, to wide global economic turmoil.
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The housing market was at the center of the onset of the current retreat back in 2007, but now the wide economy can be blamed for preventing a recovery in housing. Until there is a sustained period of growth in the job market, housing is unlikely to recover with any vigor. This will then weigh heavily on manufacturing, retail, and other industries that rely heavily on home building and buyer confidence.
A Wall road Journal witness of 28 major metropolitan areas show account on the rise in many of these markets. Some markets, however, such as Charlotte, Nc, Atlanta, and Some Florida markets have seen account shrink. Even with near historic-low prices and interest rates, consumers are shying away from entering the housing market. The median rate for a 30 year fixed rate mortgage last week stood at 4.57 percent, which is the bottom it's been since records have been kept. But query for home loans is also at 14 year lows, having fallen 44 percent over the last two months.
Last fall the government extended its homebuyer tax toll program, pushing the deadline from November 30th to April 30th. Buyers originally had until June 30th to close in order to qualify, but due to a backlog of sales to process, the closing deadline was pushed back to September 30th. Analysts had fully startling a summer lull in sales as the tax toll expired, but the level of the drop-off has far exceeded expectations.
Some markets have showed signs of recovery. Sales are on the rise in New York, Washington, Dc, and a few markets in California. Many other markets, however continue to plod along amidst rising foreclosures and poor job growth. Affordability is at its top in a decade in many markets, but this has been offset in many cases by tougher lending standards. Banks are typically asking for 20 percent down payments and near flawless reputation scores, especially for jumbo loans which are too big for government backing.
The chief issues facing the market are excess account and decreasing demand. There are more than 7 million homeowners at least one payment behind on their mortgages or already in the foreclosure process. More foreclosures will translate to even lower prices as banks flood the market with cheap homes.
see page The Housing store Continues to Struggle
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