From George C.
Existing homes sales rose by 2.4 percent in May, posting the first back-to-back gain in sales since September 2005. That’s the word this morning from the National Association of Realtors. The group says favorable affordability conditions have buyers bidding on reduced-price homes. The $8,000 tax credit being offered to first-time buyers is helping to spur activity. By the way, legislation is pending in Washington to raise the tax credit to $15,000. Existing sales in the West lagged the overall nation. Activity here actually declined 0.9 percent in May but the pace was 11.8 percent higher than a year ago. Prices in the West are down 30.6 percent in the past 12 months.
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Another report out this morning from the National Foundation for Credit Counseling paints an amazingly negative picture of the housing market.
Almost one-third of people surveyed — 72 million people — do not think they will ever be able to afford to buy a home.
And, 42 percent of those who once purchased a home, but no longer own it, do not think they will ever be able to afford to buy another one.
“It appears that whether a person was directly affected or not, Americans’ attitudes toward homeownership have shifted,” said Gail Cunningham of NFCC. The program also found that 74 percent of those who have never purchased a home felt they could benefit from first-time homebuyer education.
We should call BS when we see it. According to the US census bureau (Google “US home ownership rate”), the ownership rate in each decade climbed from a low of 43.6% in 1940 (after the Great Depression) to a high of 66.2% in 2000. In the first quarter of 2009, it was 67.3%. In other words, just about 2/3 of people own a home and 1/3 of people don’t. So if 1/3 of people surveyed “do not think they will ever be able to afford to buy a home”, that would be pretty dang accurate. How the heck does that show a shift in attitude toward homeownership?? How is that “amazingly negative”??
Yay! Free money.
I never understood why this country as a whole pushed home ownership as the holy grail of being an American. Home ownership in the rest of the world is something that happens later in your life. In Germany where my family is, they live in apartments until well into their 30’s and once they have worked in their career for a decade or so and have saved up enough they finally make that move into home ownership. Here it’s like you HAVE to buy a house immediately.
California’s $10k incentive is running out. This will provide a good reference point for how much of this low end recovery is about subsidies including the Federal $8k soon to be $15k.
It’s a social stigma espoused by almost everyone… the media, the government, your family, your next door neighbor, etc… Herd mentality at it’s finest.
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Here it’s like you HAVE to buy a house immediately.
Mark | June 23rd, 2009 at 9:46 am
Buy now or be priced out forever, that is what my realtor told me once again yesterday.I asked her if she took her prozac pills lately.
Great news, Walmart is hiring.
Grrr… I got the $7500-but-you-have-to-pay-it-back version last year. >:(
The rules never stop changing!
“The rules never stop changing!”
Calvinball.
“Almost one-third of people surveyed — 72 million people — do not think they will ever be able to afford to buy a home.”
I took a look at the actual polling data. The survey included 178 people who had never purchased a home. Thirty-two percent of those said that they didn’t think they would ever be able to purchase a home. The other two-thirds of this group disagreed with the concept that they would never be able to afford a home. Of those who had sold or lost their homes (87 people), 55 percent thought they would be able to buy again.
People who already owned a home (721 people) were asked if they thought they would be able to upgrade or buy a vacation home, 65 percent thought they would be able to upgrade or buy a second home. Where they get 72 million pessimists from this data is beyond me (and I’m not in the real estate field in any way).
The money quote may be “The program also found that 74 percent of those who have never purchased a home felt they could benefit from first-time homebuyer education.” Guess what NFCC and their members sell? 🙂
This is the first time I’ve posted so I don’t know if I can include a link, but here’s where you can find the poll (so everyone has a chance to argue with my conclusions 🙂 )
http://www.nfcc.org/NewsRoom/newsreleases/files09/HomeownershipSurvey.pdf
“And, 42 percent of those who once purchased a home, but no longer own it, do not think they will ever be able to afford to buy another one.”
Does this mean that folks who bought homes they couldn’t afford and went bankrupt as a result don’t believe they will ever be able to repair their FICO?
I think all we can deduce is that George is out on a limb again.
Though my initial thought was that all the convincing/pushing that came from previous generations about how great real estate is to own may not be as powerful in driving future sales.
http://www.simplych.com/cb_rules.htm
I don’t understand this.
“Existing homes sales rose by 2.4 percent in May, posting the first back-to-back gain in sales since September 2005.”
What is this in reference to? Is it the previous month or YOY? Based on the charts on CR, sales seem to rise every month from January to June. So, I don’t understand why this is the first back-to-back gain since 2005. Will someone please explain. Thank you.
http://www.calculatedriskblog.com/2009/06/existing-home-sales-graphs.html
The bursting of the housing bubble helped push the U.S. economy into the worst financial crisis in seven decades. Now the economy is hobbling the recovery of the real estate market. Corporate layoffs are forcing more cash-strapped homeowners to miss their monthly mortgage payments. Unemployment, currently at 9.4 percent, isn’t expected to peak until mid-2010 and foreclosures should crest about six months after.
“We’re in the bottom of the seventh-inning” of the housing crisis, said Mark Zandi, chief economist at Moody’s Economy.com.
But there’s still a risk the housing bust could go into extra innings.
Interest rates, for example, have climbed back from their all-time lows this spring. The average rate on a 30-year, fixed-rate mortgage was 5.38 percent last week, according to Freddie Mac.
Mindful of the negative trends, Patrick Newport, an economist with IHS Global insight, says home sales could fall another 9 percent from last month’s levels. “Things are going to get a little bit worse,” he said.
http://finance.yahoo.com/news/Home-sales-stabilizing-weak-apf-490162850.html?x=0&sec=topStories&pos=3&asset=&ccode=
You’ve got to consider that there’s a large percentage of people that have absolutely no interest in ever owning a home. LA & NYC are littered with outrageously expensive apartments, and if you’re paying their rent you could easily afford a home.
I doubt there was even a place on the survey for “not interested”.