Home Sales Decrease, Down by 80% since the Industry Boom
New home sales remain at a record low state as more people are worried about the economy and afraid to take risks in committing to home mortgage.
Do not count on the new home market for a better economy. Home builders suffered a bad month yet again in October,
reaching only a fifth of the rate of sales that they were enjoying during the industry boom five years ago.
Sales of new homes fell to an annual average at just 283,000. This was according to the Commerce Department. This is 8.1 percent lower than the already low performance in September and 28.5 percent a year ago when the rate was at 430,000 every year.
Experts on the housing market from Briefing.com forecasted that the market should reach at least 314,000 in home sales, but the actual figures now show that the performance is significantly lower.
According to Mike Larson, an analyst of the housing market from Weiss Research, the new home market was again at a disappointing state when sales plummeted to the bottom, all across the whole country.
New home sales are almost 80 percent lower than the pace that it had during the boom, which reached 1.4 million a year. Set in July 2005, that figure is now a distant past, as sales continue to stay at historic lows, even as mortgage interest rates go low and significantly lower the prices of new homes.
The Commerce Department revised the August sales figures as well, lowering it to 275,000 homes a year. This is a record low in the new home market ever since it started to track sales in 1963.
According to David Crowe, the National Association of Home Builders’ chief economist, more people are scared to buy new homes because of the grim economy, which has a lot of negative effects on the average American family. Unemployment and instability hinders them from committing to a long time of paying mortgages.
Usually, forming households increase a percent every year, as people get married, immigrants come, and careers are launched.
However, the economy has continued to slow down the personal advancement of the American. With most new graduates finding it hard to find a launch pad for their career, fewer immigrants come to the country and more couples delay marriages.
