The monthly decline was the sharpest in 13 years showing continued weakness in the unsteady housing sector
According to the Commerce Department new single-family home sales fell to an annualized rate of 937,000 units from an upwardly revised rate of 1.123 million units in December of 2006.
In the Northeast, new home sales fell 18.7 percent while they decreased 8.1 percent in the Midwest and 9.7 percent in the South. The West saw the sharpest decline in new home sales with a 37.4 percent drop.
Surprisingly, construction spending is up and Master Card purchases are on an increase. Reports show that the U.S. grew at a 3.9 percent pace in the third quarter. Even though home building activity is plunging, exports grew at the fastest rate in nearly 4 years. All this good economic news while inflation seems tame.
Oh yeah, did we mention the quarter percent rate cut? The Fed cut .25 basis point off the rate to make it 4.5%.
A Harvard study show a more upbeat view of the current housing market value correction than offered by most economists. All hinges on the course of employment growth and interest rates. The run up in housing demand over the years is buoyed by the huge increase of immigrants and their children and relatives. That trend should continue for the foreseeable future.
Both political parties are paper tigers when it comes to immigration reform. The situation is not like it was with most 2nd generation immigrants parents who had to go through strict Ellis Island immigration standards.
The number of foreclosed home returning to the market is having an effect on builders and investors. Home market values should continue a downward trend as the growing problem of affordability strengthens. The downward pressure on wages due to the large influx of immigrants is taking its toll. High housing cost and non-housing expenses leaves home ownership on a slippery slope.
American are a little less upbeat about economic prospects . Event the Economic Optimism Indes fell 2.2 points to 53.5 for the week. 50 is neutral, so we are still in the good news range.
In response to the increasingly slow housing market, mortgage companies are adjusting their businesses and layoffs are increasing.
Interestingly, according to the National Association of Realtors, existing-home sales, finishing the third-best year on record, are projected for 2006 at 6.47 million, a decline of 8.6 percent. In 2007, they’re expected to rise steadily from the current cyclical low and reach an annual total of 6.40 million, which would be 1.0 percent lower than this year’s total.
Also worth noting, Congress recently passed a new tax deduction that allows low- and moderate-income homebuyers to deduct mortgage insurance premiums from their federal taxes if they make less than $100,000.
Builder, supplies, real estate connected jobs slump as housing related employment is effected. It’s no longer boom times in the construction industry. Interest rates have settled and offer a good chance to refinance at favorable interest rates.
Property tax appeals offer an excellent means to lower your tax dollars. To keep up with additions and subtractions the municipal building department missed, the mass appraiser is contracted. Mass property tax appraisers often use the most expensive property on the block to gauge properties against. Using error in judgement often results in not making location and other value adjustments. Maybe that’s why you’re over-assessed!
At the end of the day, the person doing the measuring has hundreds of measurements and calculations in his head. He probably will not even remember your home. He doesn’t have the same recall as an appraiser making an individual property appraisal.
Inaccuracies, math errors and observation made in haste and not recorded or misplaced occur frequently. Depreciation is not accounted for. For a good do it yourself property tax manual go to Property Tax Appeal Ax You might save yourself quite a few mortgage payments when you win.
