August 25, 2010
12:40
Sharon Singleton
MoneyThe U.S. housing market is likely to remain depressed until at least next year and any further government efforts to stimulate demand would only distort the market, economists say.
Data released Wednesday showed sales of new U.S. family homes fell to their lowest level on record in July, with prices recording their biggest drop in six and a half years.
The Commerce Department said sales dropped 12.4% to a 276,000 unit annual rate, much worse than economists’ expectations for sales to remain flat.
The figures followed existing home sales data on Tuesday that showed a 27% plunge in July, raising fears that the lack of recovery in the housing market will be the straw that broke the camel’s back in tipping the overall economy back into recession.
Those fears may be overblown and the current slowdown is largely the result of the expiry of a homebuyers tax credit introduced to stimulate the market, some economists say.
“We were always anticipating a slowdown, though the magnitude is a little concerning,” said Alistair Bentley, a U.S. regional economist with TD Bank Financial Group. “The problem with stimulus programs is that you get a kick up and then have to pay the price.”
US Housing is still struggling and will likely have another year or two to get a full recovery. Something to watch and leaern from. In tough times brand recognition becomes and even more important factor as Realtors and thier clients flock to the best known brands. That is what has made RE/MAX even more important to a recovering economy.
ReplyDeleteDarryl