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Home Sales Dip in Late Autumn

[Jan 12, 2008.]

 

The number of pending U.S. home sales dropped slightly in November, according to the National Association of Realtors. The reading declined 2.6% to 87.6 from a revised October index of 89.9.

Still, the trade group expects home sales to increase quite a bit in the second half of 2008.

Real estate analyst Mike Larson of Weiss Research in Florida stated, "The best thing you can say about pending home sales is that they aren’t getting much worse." However, given the soft job market, Larson added, "You have the recipe for ongoing trouble in housing."

In a recent speech, Chief Executive Daniel Mudd of the mortgage company known as Fannie Mae said prices on homes would 'perhaps begin to gain modestly' in the year 2010.

The Realtors index dropped to a record low of 85.5 in August because of the global credit crisis. Because of a lag between the time a home buyer signs a contract and the actual deal, sales finalized in December and into January should be recorded in the November reading.

Officials say that a reading of 100 equals the average sales in the year 2001, when the index was initiated. Realtors predict that home sales will jump this year by 0.9% to 5.7 million. The sales rate was 5.65 million last year. Meanwhile, forecasters predict that home sales will reach 5.91 million next year.

The median price for existing homes in America has declined 1.9% in 2007 to $217,600. That’s the first decrease since the realtors began tracking the housing market in the year 1968. In 2009, however, the median price is expected to increase to $224,400.

The housing crisis is expected to continue through at least the middle of 2008, if not beyond. As a result, it's become a key issue in this year’s Presidential contest.

Julie Ann Amos
January 12th 2008

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