Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

UK House Prices on the Rise

Housing-Market / UK Housing Jun 03, 2009 - 05:01 AM GMT

By: LiveCharts

Housing-Market

Pending home sales climbed 6.7 per cent in April, which is the highest single monthly jump in about eight years. Pending sales are deals made by a buyer to close on a previously owned home.


Many analysts have begun to speculate the levels of home sales could reach those last seen at the start of the stock market sell-off last year. While pending sales are often seen as a good barometer of the real estate market, many are still concerned that a full recover in housing could be a ways off.

Foreclosures are still relatively high based in large part on growing unemployment and continued layoffs. Most economists believe that while home sales appear to have stabilized, home prices are probably going to keep falling even farther than already historic low levels. Simply put, there aren’t enough dollars or credit available to potential buyers to help drive prices higher.

Why have pending sales picked up? In part, it is because home prices are at such low price points that some people have found deals hard to pass up. Despite a rise from 5 per cent to about 5.3, according to bankrate.com, the national average 30-year fixed mortgage rate is still extremely low. Low home prices and low mortgage rates create a very valuable opportunity for buyers.

Perhaps the most credit for the more recent spike goes to an $8,000 first-time home buyer tax credit that President Obama included in his February economic stimulus plan. Combined with the aforementioned discounts on homes and loans, this makes for never-before-seen opportunities for new entrants into the housing arena.

The housing market has been in a slump that is now running on three years. Stability in home sales is a good initial sign that conditions might have reached their worst. But, the 15 per cent price decline in April from the same month last year brought the average home sale price to $170,200. According to the National Association of Realtors, this is the second greatest yearly price decline on record.

It may sound contradictory that gains in pending home sales levels would not bring a correlating rise in prices. After all, basic supply and demand economics suggest if demand has increased that dramatically, prices should climb. The problem for price levels is more on the supply side. There are still plenty of foreclosed and distressed properties flooding markets across the country with surplus inventory. Many of these properties are selling at much lower price points than they would have just last year, or even a few months ago, in some cases.

Obviously, there are still some obstacles in the way of a return to consistently prosperous housing. However, most Americans would likely agree that prospects are more positive now than they have been for a while. If unemployment does peak in early 2010, as has been commonly suggested, home values could begin to rise mid-to-late next year.

Neil Kokemuller

LiveCharts.co.uk

Neil Kokemuller is an Associate Professor of Marketing at Des Moines Area Community College in Des Moines, Iowa, USA. He has a MBA from Iowa State University. He is also in house stock market commentator at Live Charts UK, where you can find real time charts and share prices .

Copyright © 2009 Live Charts

Please note: The information provided in this article is intended for informational and entertainment purposes, and not as advice for financial decisions or investments. Actions taken on the basis of the information shared is at the sole risk and discretion of the individual. Currency investment poses significant risk of loss.

Live Charts Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in