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Gloom taints US housing market
Source: Agencies |
September 22, 2011, Thursday
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THE number of Americans who bought previously occupied homes rose last month, but US sales were driven by an increase in foreclosures, a gloomy sign that home prices could fall further next year and slow a housing recovery.
The US National Association of Realtors yesterday said home sales rose 7.7 percent last month to a seasonally adjusted annual rate of 5.03 million homes - below the 6 million economists say is consistent with a healthy housing market.
Last month's pace was slightly ahead of the 4.91 million sold in 2010, the worst sales level in 13 years.
Homes at risk of foreclosure made up 31 percent of sales, up from 29 percent in July. Many are being bought by investors.
Activity among first-time buyers, who are critical to reviving the market, was unmoved. They made up only 32 percent of sales, matching the July level. They normally make up 50 percent of home sales in healthy markets.
Many people are reluctant to buy a home more than two years after the recession officially ended. Some cannot qualify for loans or meet higher downpayment requirements. Even those with good credit and stable jobs are holding off because they fear prices will keep falling. Sales are also being hurt by a steep decline in first-time buyers.
Since the housing boom ended in 2006, sales have fallen in four of the past five years. Declining home prices and record-low mortgage rates have failed to boost sales.
Most economists say home prices will keep falling, by at least 5 percent, through the rest of the year. Many forecasts do not anticipate a rebound in prices until at least 2013.
The US National Association of Realtors yesterday said home sales rose 7.7 percent last month to a seasonally adjusted annual rate of 5.03 million homes - below the 6 million economists say is consistent with a healthy housing market.
Last month's pace was slightly ahead of the 4.91 million sold in 2010, the worst sales level in 13 years.
Homes at risk of foreclosure made up 31 percent of sales, up from 29 percent in July. Many are being bought by investors.
Activity among first-time buyers, who are critical to reviving the market, was unmoved. They made up only 32 percent of sales, matching the July level. They normally make up 50 percent of home sales in healthy markets.
Many people are reluctant to buy a home more than two years after the recession officially ended. Some cannot qualify for loans or meet higher downpayment requirements. Even those with good credit and stable jobs are holding off because they fear prices will keep falling. Sales are also being hurt by a steep decline in first-time buyers.
Since the housing boom ended in 2006, sales have fallen in four of the past five years. Declining home prices and record-low mortgage rates have failed to boost sales.
Most economists say home prices will keep falling, by at least 5 percent, through the rest of the year. Many forecasts do not anticipate a rebound in prices until at least 2013.
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