Sales of new homes plunged to a 12-year low in November…the slowest pace since April 1995.
New-home purchases are down 34.4 percent from a year earlier, the biggest year-over-year drop since January 1991. That leaves a large, if shrinking, inventory of unsold homes to be worked off before the glut can be dissipated…
Even as new homes become more affordable, the Friday report from the Commerce Department underscores the challenges facing the residential construction industry as tighter credit and the fear of further declines in values continue to shrink the pool of potential buyers. Rising foreclosures and a wave of cancellations have crippled the nation’s biggest home builders and sent their stock prices into a steep decline…
The current decline is the steepest peak-to-trough drop since the 1982 housing bust, said Michael T. Darda, chief economist at MKM Partners, and it could grow steeper if sales continue to flag.
The article hunts for the odd bit of light at the end of the tunnel. Whistling in the dark – and no dawn in sight.
The politicians and corporations in charge of these United States – if you see any real differentiation – only think of homes as a commodity to be treated like any other. So, don’t expect a boatload of concern from either quarter.
The statement “That leaves a large, if shrinking, inventory of unsold homes” doesn’t seem to fit with the article. There must be something more to it than what was quoted here. Perhaps something about new home starts?
Its going to get worse. Most “new homes” are in outlying suburbs, and with gas prices still on the rise it makes less financial sense to live in the ‘burbs.
Close to work housing is selling a little better. “McMansions” are not selling at all.
well,
Lets see…
USA sells most of its wood and metal to China.
USA inflates the price of those materials, to make MORE money.
WHICH forces the price of wood/metal nationally UP’ and wood/metal is getting scarce.
USA imports wood from canada.
USA gov, installs a 25% tariff on Canada wood. Forgetting NAFTA, and not caring.
Inflated prices, 25% Tariff, and COST of homes going thru the roof.
#3 – won’t comment on your sociology; but, the most significant factor affecting domestic commerce in homebuilding materials still tracks back to the Oil Patch Boys and their war profiteering.
Building materials have had energy cost and transportation surcharges added month-by-month since the 2nd year of Bush’s War. No refunds, no reductions, no going back.
Maybe Im just at that age, but It also seems like the Boomers are dying faster than they expected too. However, this is just my anecdotal observation. In the last couple of years it seems like a whole lot of people I know at the vanguard of boomers have died. Cancer mostly…
Oh well. Think I really feel sorry for get rich quick developers and house flippers who thought this would be their ticket to the big time. Maybe now housing will be a little more affordable to those of us who buy houses to live in.
And so, the illusion of a prosperous nation under a Republican rule is shattered.
You better suck it up and pretend you like people with a different ethnicity/religion/sexual-preference/gender like in the Clinton days.
#8 – Angel
Or you might end up with Dubya v. 2.0.
#8 I maintain that as long as the US government spends more than it takes in, the economic good times are financed by debt.
Any moran can appear to be rich through unrestrained use of credit cards and mortgages, just like our government, but eventually the bills come due.
The problem is that the economy is driven by the theory of continuous “expansion” aka inflation.
The ability to pay debts is dependent on the future value of those debts being eroded by inflation. Without expansion, we will not be able to pay those debts, and forfeit our standard of living.
Whatever.
ECA said
Inflated prices, 25% Tariff, and COST of homes going thru the roof
—–
You’re a complete moran.
Low interest rates pushed housing prices through the roof. Plain and simple.
Low interest rates also allowed the Fed to print an unprecedented 3 trillion dollars in 5 years. Money is created through debt. This is the ONLY thing that has kept the US economy afloat over the last 8 years, because wages have been stagnant for over a decade.
The party is about to come to end… and in a BIG way.
It’s about time the real estate bubble popped.. We could use a nice correction in the housing market.
Maybe all these stupid house flipping T.V. shows will stop too now.
I forgot to mention that expansion through technological and/or resource development can be a good thing.
But when the government “creates” expansion by borrowing money to pay for increases in economic activity, they are robbing our future to pay for an extravagant present (to prop-up the economy).
We’ve been in this state since early 2001, and the problems we’re causing DWARF the housing bubble.
I’m a Realtor as well as an economist, so I enjoy having access to the real sales data for my market. I pulled some stats:
* Homes over $500k with under 2 acres currently have a bit over a year’s worth of inventory.
* Homes $100k – $200k currently have about 4 months worth of inventory.
The point is, for the average middle class person in my area, a $200k house may even be overkill. Around here that will buy you 4 bedrooms and 2.5 bathrooms with a 2 car garage.
It’s the folks that lived above their means in the $500k+ houses, taking equity loan after equity loan, that are screwed. And to the point, does anyone feel *that* sorry for them?
11,
so, sending most of our wood products to China, and inflating the price, by 2 times, then IMPORTING wood and adding a 25% tariff dont count?
Take an $8 piece of wood, and double the price and add 25%… $24 dollars per Stick.
Take a $40,000 home, and DOUBLE the cost to build, Then add $25%…$120,000 INSTANTLY..
Then add the SALE price on a NEW home, another 50%..$180,000, NOW add interest..
Or do you want to go back 15 years, to Credit cards that had a NICE statement in them, that the interest on the card was the National rate +9%…WHICH would be cool…IF’ they didnt renig on the contract when the interest rate HIT 1%…They DIDNT go down, they STAYED UP and changed your contract.
ANd no one took them to COURT for BREACH of contract.
#14 – Drew in Greenville, SC – …does anyone feel *that* sorry for them?
Not really. A coworker of mine just bought a $400k house… and we just know that he can’t afford it. Soon we’ll hear the usual “I can’t feed my kids” song from him.