| Greetings! The global financial crisis started in the U.S. housing market, and many analysts believe that if the world economy is going to rebound, the recovery will begin with U.S. housing.
That's why the government has intervened with a spate of measures to stem foreclosures and prop up the market. And it's why for months, investors and analysts alike have poured over housing data looking for any indication of which way the economy might be headed.
For those who have kept an eye on such statistics as home prices, sales, inventories, and mortgage applications, the data has presented a murky picture.
Indeed some reports from the housing market have offered a ray of hope:
- Sales of previously owned homes, which account for about 90% of the market, rose 5.1% in February.
- New-home purchases, which make up the rest, increased 4.7% from a record low the month prior.
- The National Association of Realtors' affordability index inched higher to 173.5 in February - an all time high since it was first created in 1971.
- U.S. mortgage applications soared 32% in March, after the Federal Reserve said it would buy Treasury securities for the first time in more than four decades.
- Inventories fell. The seasonally adjusted number of homes for sale fell to 12.2 months from 12.9 months in February, based on current sales rates.
- Affordability conditions continue to improve as mortgage rates fell to near 4.5% and home prices remain exceptionally low.
But that's just the good news. Here's the other side of the coin...
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New home sales in January were down more than 10% from December and remain at the lowest level in recorded U.S. history (data that goes back to 1963). -
Sales of existing, single-family homes have dropped to the lowest level in 11 ½ years, with no end in sight. -
The median price of a new home is down to $201,100 - the lowest since December 2003. Existing home prices have fallen to a median of $170,300 - the lowest in almost six years. The median sales price fell 19% from 2008 in February, the biggest year-over-year drop since records began in 1964. BREAKING NEWS!!! Wells Fargo expects earnings of $3 billion!!! So which is it? Is the housing market finally on the road to recovery or is the good news just more false hope about to be dashed on the rocks of a relentless recession that won't let up?
We all want answers but we will have to be patient. In the meantime, keep researching stocks and send them in to us!
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