The Truth Behind the Housing Numbers

Article Written By: dane

The recent headlines have trumpeted a rebound in the American housing market. According to the Associated Press, July's 7.2 percent increase in home sales was the biggest month-to-month jump in the last ten years. But before breathing a sigh of relief and checking Zillow for increased home values, it might be a good idea to look at the story behind the new and improved numbers.

A big chunk of the recent increase is first-time home buyers taking advantage of the tax credit. One third of recent home sales are due to the $8000 incentive for first-time home buyers, which will end in November. Another third of the recent sales across the nation are actually foreclosures. According to a recent report on NBC news, home prices overall are down 23 percent in the last year, largely due to the number of foreclosures across the country.

NBC news broke down the numbers even further, showing that the biggest surge in home sales are for homes under $100,000. While sales of homes in this price range rose an impressive 39 percent in the last month, sales for homes over $250,000 are actually down. In fact, the higher the price tag the fewer homes are selling.

Better numbers in several sectors of the economy, including housing, have led Federal Reserve Chairman Ben Bernanke to announce that the U.S. economy is on the verge of recovery. He said at a Federal Reserve conference in Wyoming that andquot;the prospects for a return to growth in the near term appear good.andquot; Not a resounding endorsement of the world economy, but certainly keeping to the more positive tone he has taken lately.

According the Associated Press, Bernanke continues to stress the importance of freeing up consumer credit, stating this is the key to any kind of long term economic recovery. However, banks continue to be careful with lending to consumers. Mortgage defaults remain at an all time high--which brings us back to the housing numbers. While foreclosures continue to less of a factor in Austin as they are in other parts of the country, they are taking a toll on the economy as a whole.

As the latest housing numbers have indicated, foreclosures are great for bargain hunters but bad for the housing sector and the overall economy. It only takes one foreclosure in a neighborhood to skew the assessment of overall home values in that area. Mortgage defaults that lead to foreclosures cost banks a significant amount of money. The banks in turn raise rates on credit cards and fees to recoup some of these losses, along with making fewer loans overall.

The real estate industry is lobbying Congress to get an extension on the first-time buyers' tax credit, because many industry analysts are predicting a plunge in the housing numbers after November. andquot;I would not be at all surprised to see a dip at the end of the year once the tax credit expires,andquot; Robert Dye, senior economist with PNC Financial Services Group, told the AP.

Austin continues to weather this long recession better than the rest of the country, but let's hope the story behind the national numbers gets better.

About the Author

Ki moved to Austin for school. After graduation, he started working in the Austin real estate market. He has a website where future owners can search the Austin MLS. His website also has a blog with updates in Austin Texas real estate.

You Can Link Directly to "The Truth Behind the Housing Numbers" by using the url:
http://www.allbestarticles.com//finance/real-estate/the-truth-behind-the-housing-numbers.html

This Article Has Been Published on Wed, 9 Sep 2009 and Read 96 Times

Find All Best Articles at http://www.allbestarticles.com

Rating: Not yet rated

Comments

No comments posted.

Add Comment

You do not have permission to comment. If you log in, you may be able to comment.

Related information on Real Estate

Why do I need a conveyancing solicitor when buying or selling real estate?
London Living: The Best in the World
Real Estate Toronto Neighborhoods and Property Hunting for Leases
The Affordable Secret of Mayfair Office Space
10 Ideas To Follow When Selling Your House
Property in Belgravia - London's Centre of Architectural Splendour
Is Abu Dhabi facing Dubai-like property slump?
Chesire England Serviced Offices.
Find out About Relevant Ideas To Choose Horse Stables
Pros and Cons of locating an office in Mayfair
Things to keep in mind when choosing where to locate an office in London
Guide To Buying A 2 To 5 Million Dollar Home In The Dell In Hollywood
When Selling A Home On Sunset Plaza, Point Out The Exclusiveness For The Fastest Sell
An In-Depth Look At The Toronto Home Market
What a Phoenix Real Estate Listing Will not Show That A Neighbor May
Which are the prime areas for office space in London?
Tips to make the most of your office space
How have commercial property prices in London been affected by the recession?
Benefits of working in Covent Garden
Investment opportunities in Pakistan Real Estate sector
Quit Claim Deed Basics
Dubai The Place To Be In Terms Of Property
Buy House in Philippines
Best way to write professional advertisement for Dubai properties
Things to consider while getting a house on rent