The big question is whether we're headed for a double dip in home prices, or if the market will slowly stabilize.
HousingWatch has gathered some of the top headlines from TV and print in the past 24 hours to help determine how the news may affect homebuyers and sellers:
New Home Sales Take Record Dip: Brian Williams on the NBC Nightly News delivered the news that new home sales "fell off a cliff in the month of May, down almost 33 percent for the month to the lowest level on record." But unlike some other outlets, Williams dismissed the notion that the end of the homebuyer tax credit was the main cause of the precipitous drop: "The staggering drop reflects, we're told in part, the expiration of the homebuyer tax credit, but the prior two months of sales data were revised downward, as well." The doom-and-gloom perspective appealed mostly to Williams' generally older viewers, who have a shortened view of home value trends.
But New Home Prices Were Up a Little: An article in this morning's Los Angeles Times points to the figures released Wednesday by the Commerce Department, reporting new homes "sold at a seasonally adjusted annual rate of 300,000 units in May, a record 32.7 percent drop from the revised April estimate and 18.3 percent below the May 2009 figure." But not all new-home-sales news was completely bad, the story says, since the median sale price of new homes "last month was $200,900, a 1 percent increase from the previous month." It adds, though, that this figure was a "nearly 10 percent decline from the year-earlier median." The Commerce Department also "estimated that 213,000 new houses were for sale at the end of May, representing a supply of 8 1/2 months at the current pace."
Mortgage Defaults Could Have Long-Term Effect on Consumer Spending: Another dispatch from today's Los Angeles Times warns that while "loan modification or foreclosure might allow" struggling homeowners to "put their housing problems behind them," this will not necessarily help the overall economy. The problem, according to the piece, is that "millions will be dogged for years by the aftermath -- a credit score so tarnished by the housing debacle that lenders will avoid them." Even if those credit-besmirched consumers are able to qualify for loans, "high-interest rates are likely to strain their budgets." Unfortunately, the conclusion is not a happy one: The credit score issue "is one remnant of the housing crisis that is sometimes ignored by economists," but the "effects may well be a drag on the nation's consumption -- and the economy as a whole -- for a decade or more." Here's hoping your credit scores stay high and your interest rates remain low.
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