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Concern over poor home sales
Source: Agencies |
August 19, 2011, Friday
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THE number of Americans who bought previously occupied homes dropped last month - the third decline in four months, suggesting the depressed housing market will not help the US economy recover this year.
Home sales fell 3.5 percent last month to a seasonally adjusted annual rate of 4.67 million homes, the National Association of Realtors said yesterday. That is far below the 6 million economists say must be sold to sustain a healthy housing market.
And this year's pace is lagging behind last year's total sales. The 4.91 million last year was the weakest sales figure in 13 years.
Falling home prices have kept many people from selling houses and taking new jobs in growing areas. They have also reduced the consumer spending that drives the US economy.
Bigger downpayments, tougher lending rules, high debt and a shortage of desirable starter homes have kept many buyers away. Even some with good credit and enough money for a downpayment are holding back because of worries that home prices will keep falling.
First-time buyers, who are critical to a strong and stable housing market, increased slightly to 32 percent of sales. Normally, they make up about half of home sales - their purchases of low and moderately priced homes allow sellers to move up to pricier homes.
Since the housing boom collapsed in 2006, sales have fallen in four of the past five years. Declining home prices and super-low mortgage rates have failed to boost sales.
The average rate on a 30-year fixed mortgage fell to 4.15 percent this week - the lowest level since records began in 1971.
Foreclosures and short sales - when a lender agrees to sell for less than is owed on a mortgage - comprised about 29 percent of all home sales last month, up from about 10 percent in past years.
Home sales fell 3.5 percent last month to a seasonally adjusted annual rate of 4.67 million homes, the National Association of Realtors said yesterday. That is far below the 6 million economists say must be sold to sustain a healthy housing market.
And this year's pace is lagging behind last year's total sales. The 4.91 million last year was the weakest sales figure in 13 years.
Falling home prices have kept many people from selling houses and taking new jobs in growing areas. They have also reduced the consumer spending that drives the US economy.
Bigger downpayments, tougher lending rules, high debt and a shortage of desirable starter homes have kept many buyers away. Even some with good credit and enough money for a downpayment are holding back because of worries that home prices will keep falling.
First-time buyers, who are critical to a strong and stable housing market, increased slightly to 32 percent of sales. Normally, they make up about half of home sales - their purchases of low and moderately priced homes allow sellers to move up to pricier homes.
Since the housing boom collapsed in 2006, sales have fallen in four of the past five years. Declining home prices and super-low mortgage rates have failed to boost sales.
The average rate on a 30-year fixed mortgage fell to 4.15 percent this week - the lowest level since records began in 1971.
Foreclosures and short sales - when a lender agrees to sell for less than is owed on a mortgage - comprised about 29 percent of all home sales last month, up from about 10 percent in past years.
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