Friday, April 23, 2010
Sharp Rise in New-Home Sales in March
There is finally good news coming from the real estate market! Sales of new homes increased by 27% last month. Economists suspect potential home buyers are trying to take advantage of the home buying credit that will expire at the end of the month. However, the number of new homes for sale only fell by 2%, which means that it would still take seven months to exhaust the supply of current homes for sale. Regardless, this is good news and is reflective of the overall improvement of the economy. Orders for manufactured goods are on the rise and last month there were the most orders since the recession began.
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At this rate it would take seven months for all the homes on the market to sell, but I would suspect this 2% will start to grow more rapidly as consumers gain more confidence. This confidence will ultimately come when consumers no longer fear investing in a house will lose them money as the house loses value.
ReplyDeleteI agree that the surge of new housing sales is a good news. However, I think it is more reasonable to be cautious since, as a matter of fact, the rising sales owe to the homebuyer tax credits to a certain degree. Although, according to this article, it seems that so far it has not been a big impact on housing sales with the end of the tax credit, yet as many analysts point out, in a long run, the outlook for the housing sector is unpredicted to a certain degree.
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