New Home Sales Drop to the Lowest Level in Sixteen Years

Posted on May 13th, 2008 by saman

Three months ago, new home sales dropped to their slowest pace in more than sixteen years. The housing downturn that has been occurring for the past two years had extended into a new spring sales season. The average price for new homes in the month of March fell at the fastest rate it has ever experienced in thirty eight years. New home sales have dropped by about eight percent in April. The adjusted seasonal rate is five hundred twenty six thousand units. This is the slowest pace of sales since October of 1991.

The average price of a new home dropped by about thirteen percent compared to March of last year. This is the biggest price decline since July of 1970 when the percentage plunged by about fourteen percent.

Housing that has been booming for the past five years, has gone into long slump for the past two years. The sale of home and home prices are falling sharply, especially in areas where the housing market was the best.

Some financial analysts say that they believed the decline in home sales may be reaching an ending though they also say this rebound would be slow with priced continuing to drop until next spring.

The sales of non new homes have dropped by about two percent in the month of March. This is a price decline of seven percent since last year. Right now it is much better to be a home buyer than a home seller.

There was the hope that house sales would stabilize in the Fall but it is more probable that the prices will continue to drop until the spring sales season next year. Prices are still low because there is a large inventory of homes that have not been sold. This backlog of homes is a reflection of the increasing number of mortgage defaults. These defaults are dumping a lot of homes on an already overwhelmed market.

The growth of the economy came to an almost standstill at the end of 2007 as the economy was being negatively affected by a serious credit crunch and the long running slum p in housing. These factors have resulted in the loss of billions at some of the country’s biggest financial institutions. Economists believe that the country is now in a recession even though President Bush disagrees. He says the country is in an economic slowdown, not a recession.

Consumer confidence has dropped to serious lows as people in the country have watched gasoline prices soar to the ridiculous price of $3.50 per gallon.

In the month of March, sales of new homes have dropped in several regions across the country. New home sales have dropped in the largest numbers in the Northeast. The northeast is experiencing a new home sales decline of nineteen percent. In the West new home sales fell by twelve percent In the Midwest new home sales have dropped by twelve percent while new home sales in the South have fallen by about six percent.