Home Sales Tank: What it Means for You
Existing home sales plunged in December, falling nearly 17 percent from November in their largest month-over-month drop since
record-keeping began. Meanwhile, December's inventory represented a 7.2-month supply of unsold homes, notably higher than the
6.5-month supply recorded in November, the
Although the monthly
decline was larger than expected, the figures are much less jarring when compared with
Although the monthly drop-off was steep, it had been expected for some time. Buyers scrambled to close transactions by November to qualify for the
Property owners who have watched home values at the national level drop roughly 30 percent from their 2006 peaks will see some optimistic-looking data in the report. First, the national median existing home price increased 1.5 percent, to
How much further will home prices fall?
For home buyers:
Those looking to purchase a home this year should be encouraged by the report, which signals that buyers will at least retain leverage in the real estate market through the spring season. Buyers already have a number of things going for them. The tax credit has been extended and expanded to include even current homeowners who close a transaction by the end of June. Thirty-year, fixed mortgage rates fell below 5 percent for the week ending
But would-be home buyers should keep their eyes on mortgage rates, which are likely to head higher as the year progresses. The Fed was able to pull rates on 30-year fixed mortgages to historic lows by launching a program to buy up debt and mortgage-backed securities from
For home sellers:
Although home sales should rise from December's depressed levels, those looking to sell property this spring will still have to have to work for it, said
Predicting the Fed's Next Move
The Federal Reserve didn't pull out any surprises when it blandly announced that it will keep interest rates near zero as the economy continues to recover. But even as the Fed remains fairly tight-lipped about when it will begin ratcheting up rates, economists have been quick to speculate about what's in store. Here are some predictions
Although home prices continued to stabilize in November, real estate experts believe we have another 5 or 10 percent of declines in store before values finally hit bottom. Home prices in 20 major cities declined 5.3 percent in November 2009 from a year earlier, a significant improvement over the 13.3 annual drop posted in July
Obama - Trashing the Job Makers
Victor Davis Hanson
A year ago Obama inherited a recession brought on by the collapse of the housing bubble. The crash was made worse by recklessness on Wall Street. Job losses followed, and in response, Obama pushed through an epic stimulus bill. Yet despite the stimulus, unemployment soared from 7.6 percent to 10 percent. Now, an embarrassed administration continues to cite jobs saved, rather than jobs lost
Prosperity Isn't Coming Without Structural Rebalancing
President Barack Obama did a fine job with his first State of the Union address. His basic theses were: The middle-class is suffering. We must create more jobs. Banks have to pay more. Democrats and Republicans should get along. Nice. But to reignite a constituency for a progressive vision, Obama should be talking in broader strokes.
The Economy, Jobs and Justice
The effort to save America's financial system and big banks has succeeded. However, the clot in financing remains. Finance is the blood of the economy. When there is a clot, the economy can't work and people suffer. Republicans contewnd that Obama's recovery plan has failed. Yet, they want to prescribe the same poison that created the breakdown in the first place.
Financial Fat Cats
(c) Matt Davies
Rising Yachts Lift No Tides
The government argued that they had to resuscitate the banks in order to save the U.S. economy. So, they rescued the banks not to save the banks, but to save the economy. It 'worked.' Banks are back, making profits and gearing up bonuses. However, unemployment and home foreclosures are rising and personal bankruptcies are at record levels. Obviously, there is a fundamental disconnect ...
Global Economy: 7 Countries Spooking Investors
Despite federal spending consuming 27.2 percent of GDP, the United States maintains a Aaa rating. But you can't say the same about many countries in both the developed and developing world where continued fallout from the economic crisis is hurting their credit ratings. As a result, investors have viewed the economic situations in these countries as increasingly risky bets.
Foreclosure tallies continue to break records and even more homeowners appear headed for foreclosure this year. However, as the housing crisis rumbles forward, an additional driver of home foreclosures has become clear: Strategic Defaults -- borrowers able to pay their mortgage are simply walking away because they believe it's best for their finances
Wall Street CEOs: The Mea Culpa That Wasn't
Here is the testimony I would have liked to have heard from the CEOs of Wall Street's largest banks -- institutions whose irresponsibility and greed nearly brought down the economy
Let Us All Now Bail Out the States
Most states must balance their budgets by constitutional stipulation -- a concept also viewed with a federal sneer. In the depression year of 2009, the feds bailed out the states to the tune of $87 billion. In the current fiscal year, state budget shortfalls are expected to total about $180 billion, with a like amount (or more) anticipated for fiscal 2011.
Detroit - Who's Your Tiger
In the last 18 months, the auto industry has become something bigger than just the buying and selling of cars. It has become an ideological ground zero, a tug of war with many hands on the rope, labor, manufacturing, nationalism, elitism, environmentalism, jobs, the survival of a shrinking but vital American city: Detroit
Politics Behind Hugo Chavez's Currency Devaluation
A lot has been written in recent days about the economic impact of drastic devaluation of the Venezuelan currency announced by Venezuela's authoritarian-populist President Hugo Chávez. But the measure's political impact may be just as important, if not more.
Home Sales Tank: What it Means for You | Luke Mullins
(c) 2010 Luke Mullins