The housing market has not hit rock bottom and it is hard to know what the bottom will be. The outlook is poor. Even Reuters reported that pending home sales dropped 5.5% in April. Mortgage applications dropped 1.3%.
The National Association of Realtors announced the downturn on its Pending Home Sales Index.
Reuters reported that the numbers still remained sharply higher from a year earlier, and economists said the data did not change the view that the U.S. economy remains in recovery mode. They claim to be seeing stabilization. I hope they are correct.
Reuters’ positive outlook is partly based on stats from a year ago, which were even more dismal, and which do not reflect the whole story.
So much depends on what stats you are looking at and how you are looking at them.
The U.S. Department of Housing and Urban Development records information for new home sales, which is obviously different from pending home sales, but it is still relevant to my point.
My point is that the reality of what is actually happening in this housing market is sometimes obfuscated by the media reports.
Sales of new single family homes at a seasonally adjusted annual rate (from April to April) are poor –
- 2002 – 915,000
- 2006 – 1,198,000
- 2007 – 981,00
- 2008 – 526,000
- 2009 – 352,000
- 2010 – 504,000 (two-thirds of current homeowners and nearly all first-time buyers were eligible for thousands of dollars in tax perks when they purchased a house which might account for this jump)
- 2011 – 323,000
- 2012 – 343,000
The average sales price from April to April show weak positive signs –
- 2002 – $226,800
- 2006 – $298,300,
- 2007 – $299,100
- 2008 – $321,000
- 2009 – $252,000
- 2010 – $249,500
- 2011 – $268,900
- 2012 – $282,600
Read about new home sales at Census.gov/construction
Click this link for existing one-family homes sold. In 2002, homes sold were 4,974,000, in 2008 – 4,350,000 and in 2010 – 4,308,000 (no figures available beyond that date). The recovery is very slow.
The President’s loan and bailout programs have shown no sign of having a lasting effect.