For January 2008, U.S. home sales dropped by 0.4% to an annual pace of 4.89 million homes. According to the National Association of Realtors, which tracks home sales, the year-to-year drop was 23.4%, the largest dip since the association began tracking these trends in 1999.Average housing prices also retreated, falling 5.1% to $198,700. The association estimates that there are now 4.2 million homes available for sale which translates into a ten-month supply.
Strong Rebound Expected This Spring
Despite the current difficulty in the housing market, some analysts are expecting a strong rebound to begin this Spring, attributing the reversal to the following:
- Mortgage interest rates are down, very near to historically low figures.
- Housing prices have dropped, making purchasing a new home within the reach of more homeowners.
- The oversupply of homes means that sellers are willing to deal. Savvy buyers are doing their homework and finding some great buys.
The nation’s largest builders have had to cut prices and trim production, as they have felt the strain of the housing slowdown. Lennar, Hovnanian, Toll Brothers and KB Home have all reported large losses for the fourth quarter of 2007, with these same losses continuing into 2008.
Further Reading:
More Signs Of Home Sales Weakness
Understanding the True Costs of a Mortgage
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