Home Sales At Lowest Levels On Record

[May 28, 2008.]

 

The news looks bleak when it comes to home sales and consumer confidence. This past February saw the lowest rate of pending sales in history. Many look to the housing market as a way to determine if the U.S economy has reached recession status. Given the data from February many experts in the financial arena now believe that if the U.S economy is not yet in a recession it will be very, very soon.

The National Association of Realtor's Pending Home Sales Index has hit its lowest level on record. Although the record only stretches to 2001 it is still considered significant.

Along with the increasing decline in home sales, consumer confidence in the economy is also plummeting according to Investor's Business Daily and TechnoMetrica Market Intelligence. According to this group consumer confidence is at its lowest point since it began tracking such data, in 2001.

Scott Brown, who is a chief economist at Florida based Raymond James and Associates stated recently. "The data suggest we haven't really seen a bottom yet in the housing market." Florida has been one of the hardest hit during the housing crises.

Even though the Federal Reserve has cut interest rates by significant amounts and plans to do so again at the end of April, consumers are still finding it hard to find affordable mortgages and other loans such as credit cards or auto loans.

Many experts believe that the lack of consumer confidence is contributing to decline of the credit markets. It is possible that consumers are waiting to see which direction the market takes before making any major investments.

Many real estate groups are hopeful that the housing market will begin to stabilize in the second half of 2008, and this may help improve consumer confidence, which remains at all time lows.

The fact remains that with massive lay offs continuing and wages being cut it may be hard for consumers to regain trust in the economy.