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- iHaveNet.com: Economy
by Luke Mullins
Real estate values increased slightly but are expected to dip in the coming months
Although home prices increased slightly in June, economists warn that real estate values appear to be headed for fresh declines.
Home prices in 20 major metropolitan areas inched 1 percent higher from May to June on a non seasonally adjusted
basis, according to the
Although the data are published monthly, the closely followed
In an effort to arrest the decline in real estate prices, the Obama administration began offering tax credits worth up to $8,000 to qualified home buyers who signed a sales contract by April 30 and closed the transaction by June 30. (The closing deadline was later extended to the end of September.) The legislation, however, triggered a "pull-forward" effect on demand, as consumers who would otherwise have bought property in later months made their purchase sooner to qualify for the credit. The program succeeded in juicing home sales in the run-up to the original closing deadline only by siphoning off demand from the following months.
As a result, transaction volumes have plummeted in the months since the tax credit expired. Existing home sales in July fell 27 percent from the previous month, while new homes sales slumped to their lowest levels in nearly half a century. "
Economists expect weakness is sales to drag the
The most recent
Newport expects the
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Economists See More Home Price Declines Ahead