Recent reports show an 11% increase in the construction of single-family homes in June. In May, housing-industry analysts forecasted annual sales of more than 350,000. As a result of the unexpected drastic increase, analysts have adjusted their forecast to well over 384,000 new homes by year end.
At the height of the housing boom just four years ago, the U.S. Department of Housing and Urban Development (HUD) said the sales rate of new homes nationwide was over 1.3 million. And even though new home sales are still approximately 21% lower than just a year ago, builders continue to grow more optimistic about the housing market with each passing month.
Is the sales increase of new homes an indicator that the housing market has already bottomed out? Economists believe that considering the decline in value of existing homes, coupled with the foreclosure activity nationwide, the significant increase in new home sales is a favorable barometer of market activity. Others believe the $8,000 tax credit for first-time homebuyers as part of the Making Home Affordable program has boosted the demand. But that lends credence to the question: what will happen come November 30 when the tax credit goes away? Additionally, historically low mortgage rates are making home purchases that much more attractive.
If the federal government determines the tax credit was the major piece to the housing market puzzle, they may be inclined to extend it into 2010.
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Home Mortgage
July 27, 2009 @ 4:23 pm
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Christopher
July 30, 2009 @ 2:58 pm
The government are taking wrong joices, because giving credit for people who dont have knowldge or conditions is just generate more foreclosures for example, this between others.
Great Post
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August 30, 2009 @ 9:29 pm
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