U.S. Home Sales Fall More Than Forecast; Unsold Homes Reach 18-Year High

http://www.bloomberg.com/index.html
U.S. Home Sales Fall More Than Forecast; Unsold Homes Reach 18-Year High (4.9 months' worth at the current sales pace, up from 4.6 months' worth the previous month).

http://www.bloomberg.com/news/economy/economies.html


http://quote.bloomberg.com/apps/news?pid=10000006&sid=aRyq1_LKolwk&refer=home

U.S. Existing Home Sales Fall More Than Forecast (Update3)
Nov. 28 (Bloomberg) -- Rising mortgage rates and skyrocketing prices put home-buying out of reach for more Americans in October, a new report showed.

Sales of previously owned U.S. homes fell a greater-than- expected 2.7 percent last month to a 7.09 million annual rate, the slowest since March, the National Association of Realtors said today in Washington. The number of unsold homes was the highest since April 1986.

Housing affordability, already at a 14-year low last quarter, will continue to drop and deprive the economy of a source of strength in coming months, economists said. Today's report showed the median price rose about 17 percent over the past year to $218,000, the biggest jump in 26 years. The average 30-year fixed mortgage rate exceeded 6 percent in October and has kept rising since then.

``The peak in home sales activity is behind us,'' said Richard DeKaser, chief economist at National City Corp. in Cleveland. ``So far, it's a gentle trek down.'' Housing ``will present a drag for the economy,'' DeKaser said.

Existing home sales fell from September's 7.29 million annual rate. Economists surveyed by Bloomberg News forecast home resales would fall to a 7.2 million annual pace from September's previously reported 7.28 million pace, according the median of 54 estimates. The pace reached a record 7.35 million in June. <snip>

The supply of homes available for sale, another gauge of housing demand, rose to 2.87 million in October from 2.77 million. Supply represented 4.9 months' worth at the current sales pace, up from 4.6 months' worth the previous month. <snip>

Can't keep lowering wages and maintain bubbles.

to come back to reality. Looks like the money is flowing out of real estate and back into the stock market. It is time to over inflate and over value the stock market once again. And the pendulum will always keep swinging; just don't get caught on the backstroke.

...very little real money went into the housing bubble. It was *credit* money, phoney money, now down loans from banks that financed the bubble. Try getting banks to loan the same way to buy stocks? No way Jose. I very much doubt there will be a next bubble. Bob

I've been telling freinds & co-workers for the past five years not to buy property unless you can afford a traditional mortgage and are planning on keeping it for more than fifteen years.

I've seen so many people buying housing using interest only or worse, negative amortization loans just to get into the market. They are struggling (or close to it) just to make the mortgage payment. The mortgages they have usually contain a balloon payment or a payment adjustment after 5 or so years at which time these people are screwed.

Many young people I know have lost their homes due to thinking that low mortgage rates gave them a chance to buy their first home. Since new homes offered better low mortgage down payment and lower monthly payments, they bought into it only to find that there were many other payments that come with buying a new home which they did not take into consideration. For instance, new homes are ran by Home Owners associations. Home Association monthly payments are low when you first buy a house but then, they can sky-rocket without the home owner's input. New homes don't come with any landscaping. The owner must spend lots of money for landscaping which is also supervised by the Home Owners Association, and must follow their rules and dateline to finish the landscaping.

Families also had young children paying high prices for daycare, food, clothing, utilities, etc. Finally, the young families abandoned their homes and dreams. Most ended in divorce.

My brother in law has a friend in the mortgage banking business. The friend told him that there are lots of people about to lose their homes.

He said thousands of people bought homes with the "interest only" financing. These loans are about to change in 2006. Apparently there are thousands of homes ready for foreclosure. This is in the Portland area.

I'm glad I didn't fall for that ruse.

I'm in San Diego and the housing prices here right now are ridiculous. Almost no one can afford them. Last statistic I remember was that 80%+ of the houses sold in San Diego County were interest only, negative amortization or some other form of "creative" financing. I'm no genius or financial whiz but even I know this doesn't make good sense.

If you can wait 5 or so years, there should be some great properties available, and affordable.

to still have money to spend will be able to clean up, 5-10 years from now.

how to figure taxes for indidviduals who have undergone a FORECLOSURE. Because there are already so many of them and many more to come, or so they seem to know.

So Shrubonomics has one-upped the gipper, eh? That took some doing, huh?