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Subscribe to RSSSales of new homes dropped in December for the first time in four months, ending a gloomy 2011 for the housing industry and showing how far it has to go to revive fully and begin helping the recovery.
The Commerce Department said on Thursday sales decreased 2.2 percent to a seasonally adjusted 307,000-unit annual rate. That's less than the 323,000 sold in 2010, making 2011 the worst year on records dating back to 1963.
Economists polled by Reuters had forecast sales at a 320,000-unit rate. November's sales pace was revised slightly lower.
The housing market remains constrained by high unemployment, falling prices and an oversupply of unsold homes following a bust that triggered the 2007-09 recession.
The decline in sales comes as other signs suggest the depressed housing market is starting to recover. Construction picked up, sales of previously occupied homes are rising, and builders are slightly more confident.
"Although this decline was unexpected, it does not change the story that housing has likely bottomed," said Jennifer H. Lee, senior economist at BMO Capital Markets.
Ian Shepherdson, chief economist at High Frequency Economics, said easier lending requirements, historically low mortgage rates and improved hiring all point to consistent, albeit slow, rises in sales in the coming months.
"A sustained rise in new home sales is imminent," he said. "Homebuilders say so too, and they should know."
Yet the pace of new home sales remains far below the 700,000 rate that economists say needs to happen before the housing market really begins to pick up.
Reuters and The Associated Press contributed to this report.
Leave a Comment:
Hm...
I believe this would have solved our housing crisis?The Federal reserve and the US.govt. bailed out the banks to the tune of more than 17 trillion us.dollars and the banks are doing very well of course but those holding mortgages {housing market} not so well and are a continuing drag on the economy. What if our Govt. had taken that 17 trillion$ and given o% interest loans to all outstanding mortgages {all} not any new ones,these loans would be transferable in a sale of the property. Wouldn't this have bailed out the banks and the housing market,as the homeowners would have an easier time paying back the banks or selling the distressed property.
Obama mentioned something briefly about getting measures to refinance mortgages that are underwater. Although this would be expensive (and he called on the banks to do it on their debt of "trust"????) it could help people get more mobile.
the housing mess was created by GSE's
banks bought the crap because they were GSE.
bottom line: don't buy a home if you can't afford it.
Many people can afford it.
They just can't move because their current mortgage is underwater.
liberty&freedom LuVr
I've been saying the same thing since this mess began.
Wait; the worse is yet to come.
US Bank posting record profits yo. That's all they care about.
Ruken
You're right; they'll be able to live out of their cars; here in the once great U.S.A.
Where is US Bank mentioned in the article? Are they an illicit mortgage broker?
Um, getting people out from underwater mortgages would make them more mobile in the sense they could actually move (aka buy) another house?
And US Bank thing was something I read in the newspaper the other morning.
Oh no, Ruken, say it isn't so! US Bank posted a profit?....how dare a business post a profit!! How could we allow such a thing?
liberty&freedom LuVr, the government works for the banks not for the people. Think about it. Why does Uncle Sam want higher home prices? Is it wrong if people can actually save to buy a home cash down? Why do they allow mortgage interest deduction from tax? Was housing bubble intentional? Was sub-prime intentional? Google for "housing bubble kondratieff wave" to understand the modern day slavery imposed upon developed nations. They don't want to bail out average Joe. They want to enslave him for his entire life.
Ruken, apparently they can't afford it.
This article is fabrication. Obama just said in the SOTU that the economy was improving.
Why not have frannie and freddy refinance the nation, one time deal for all citizens on new and refi's @1%?
Of course not.
Or they could afford it when they bought it, before the massive waves of layoffs hit.
inmissouri
Don't forget that many mortgage companies extended credit to "non-credit worthy" clients; just to make a buck!
It should be possible to RETRACK the mortgage loan process using all documents in the mortgage application and the homeowners credit bureau report(s) to determine if the person in "default" was actually credit worthy at the time the mortgage was issued; if the person(s) were not credit worthy the mortgage in question should be "nullified and voided" for banking fraud.
Mal'achi- and they should also check to see if the amount loaned was appropriate. Countrywide tried to push us to go for twice what I knew we could afford.
glad the economy is recovering so well.
tick... tock... tick... tock.
Obama's run is about over
And who is he replaced with? That's the question.
i'm thinking about running.
i'll cut govt spending 15% across the board.
close loopholes and insist everyone pays there fair share.
i'll tax Buffet and Gates at 80%.
i'll make pot, prostitution and Oxycontin legal... and taxable.
more to come...
You'll also have to get those laws through Congress to pass them, which has been showing lately that it can't do sh*t.
i'll just buy tons of happy meals and show them some false numbers about the tax revenue created by my endeavors.
You better get Gingrich a Mighty Kids Meal. Remember he eats slightly more than the average person.
don't kid yourself Ruken... there are many on both sides of the Aisle that don't really fit in an Aisle.
I was just calling out a specific example, but you're right.
We better super size our order.
alexinPA
Boda Bing Boda BOOM ! wait...
@Alex: Uhh... Bill Gates makes ~$1 million per year in salary. Most of his wealth at this point is in holdings, and he's been busy using his ~$56 billion in assets to fund projects through his charitable foundation.
If you think being punitive through taxation is a good idea, I've got some bad news for you...
Ruken
...An American!
Has anyone seen the numbers where if you confiscated all the assets of the top 1% it would cover the governments expenses for about a year? To borrow a phrase from The Cat In The Hat:
This mess is so big and so deep and so tall,
there is no way to clean it,
no way at all.
Seems we are so much like Greece, it' hopeless.
@Matt: you are spot on. Bill Gates and his foundation are doing great things and he is going to give just about all of his money away to charity when he dies... but people don't care. They want FORCED charity to the government so they can piss it away on worthless programs and line the pockets of special interest.
They do decline in the winter but homes haven't been selling for 3 years now and the job situation hasn't got any better either.
Jobless claims up, but remain at hopeful levels
say what?
i just read that they are at 'hopeful' levels? lol
That's originally what my first post was asking, but I read "seasonally adjusted" in the article and thought maybe they have some way of accounting for it? *shrug*
This is all good news. Lower prices and foreclosures is more of what the economy needs. Please Obama don't try to stop this, I thought you wanted more affordable housing.
I wonder why MSNObama isn't covering this story:
Taxpayers still owed $132.9B from bailout: report
"If Treasury plans to sell its stock in the three companies at or above the price
where taxpayers would break even on their investment — $28.73 a share for AIG, $53.98 for GM — it may take a long time for the market to rebound to that level, the report says. AIG's shares closed Wednesday at $25.31, while GM ended at $24.92."
http://news.yahoo.com/taxpayers-still-owed-132-9b-bailout-report-051822679.html
What a great "investment" in bailing out the unions(GM), huh?
I think your estimate is a bit low. I estimate the cost and loss to taxpayers between $7.5 and $15 trillion.
Not to mention that it is unconstitutional for the government to own a private business. Guess it is okay if it is called a bailout.
POed Socially Liberal and Fiscally Conservative American
at least we are heading in the right direction. four more years.
we shall see.
so F.X
Since when has DOWN been the right direction?
F.X. you have got to be kidding me please read and think when you read it is down not up ....housing sales are down.... how is that looking up.... and whats with the four more years???? just party right... doesn't matter if the numbers are down.. just four more years..... lmfao
Well of course they did, banks are not lending!!
wait, the other story was about the economy getting better...
cool, fair and balanced.
MSLSD- the new FOX
When you de-regulate, this is what you get. Thanks, Bush administration. Between this and Iraq, you have done more to ruin America than any terrorist organization could have. It will take decades to undo this kind of damage. Decades.
Man I wish I could get the same high-quality weed they are smoking!
Interesting to see this after a steady stream of MSNBC stories claiming the housing market was recovering.
Politics anyone?
You noticed too?
Sad.........
In case you have not noticed Bush has NOT been in office in the past 3 going on 4 years...sorry excuses are for cowards. Obama said he would "heal the land and turn back the waters"...and it hasn't happene4d yet...still waiting for a dam job!
If you had passed high school social studies, you'd have learned that acts of Presidents and Congress don't take effect for years.
Banks need to get back to making profits from lending, not making their profits from fees. Stop the extraneous fees. Raise the national interest rates. Stop letting banks and corporations get near zero interest loans of public dollars. Once banks are forced to get their profits from lending, as their are supposed to, you will see them competing for business, which means they will have to lower their interest rates regardless of the national rate.
And screw those already underwater on their mortgages?
I would love to see the public shift from supporting the major Banksters ( JP, Citi, BoA...) to supporting the small, local community banks and credit unions.
It's clear the Govt is not going to control the big boys, but the public CERTAINLY can!
Get rid of Obama- put in a fiscal conserative, any of them will do just fine-Get rid of Obamadon'tcare healthcare-lower taxes on businesses...problem solved.........folks will not be leary any longer to expand their companies-they will begin hiring again-folks will have jobs and will begin buying stuff again-the government will have more revenue cause there will be more folks working and less on unenployment.......
The American Dream will come back...it will. I promise you....but first you must vote Obama put of office!
Na-Na-Na-Na
Na-Na-Na-Na
O-Bam-A
Goodbye!
"Likely bottomed"
There's some wishful thinking in a weasel-worded statement if I ever heard one.
To claim that, she would either need some substantiation or a crystal ball. Otherwise, it's a self-serving opinion.
This will be over when there are good jobs to be had. We are NOT seeing that.
Don't forget the State Of The Union speech, and an upcoming election.
There is his promise of a piece of pie for EVERYONE.
Sometimes called "election candy".
Obama to Fat Cats: Go **** YOURSELVES. He just proposed doubling their capital gains tax to 30% AND ordered them to reduce EVERYBODY'S mortgage rate to 4%
I would get about an extra 5k a year if Obama forced the bank to reduce my mortgage rate to 4%. Sounds good to me as economic stimulus
Cramer said the housing market had bottomed in the summer of 2009.-- Then again, Uncle Ben said the economy was running just SWELL in the summer of 2008. And you wonder why Contrarians rule?
The REAL problem is discredited trickle down economics is still the preferred theory of economics. Uncle Ben and the GOP still FIRMLY believe in it and that preservation of Upper Class wealth is paramount in any decision making. Go ahead, ASK them!
Barney was the most powerful gay old blade in HISTORY, the dude single handedly deregulated the banking industry DESPITE the regulation loving protests of Bush, McCain and the Tom Delay controlled House of 2001- 2007 I guess you could say he had his frigging WAY with them huh!
Fox News says the economy WILL suck come October by God, no matter HOW much they have to spin it. And Traitor Newt WILL go down!!
Quintessential Chutzpah: The Upper Class took their Bush trickle down tax cuts, used the money to build factories overseas and then outsourced everybody's job to $1 an hour Asian peasants. How's THAT for a greed is good thank you!
I love math. There are about $40 in one inch, about 2.5 million in a stack a mile high. That means the 4 trillion wasted on Revenge Wars would make a pile 1.6 million miles high, enough to go to the moon and back over 4 times.
Just think of the Mexican Wall that could have been built --especially using cheap illegal labor- with that pile of cash. It would have put China's to shame. Even the Pyramids would have paled in comparison. Ah, Monday morning quarterbacking
No s##t Sherlock! REAL unemployment numbers are never quoted (the millions fallen off the radar or severely underemployed), REAL inflation is never quoted (let's not include the two biggest necessities...food and fuel). Gee, ya wonder why new home sales are pathetic? DUH.
All smoke and mirrors folks...it's ELECTION TIME! Drop another hit of acid and trip the life fantastic. Tell Alice I said hello when you wander the Wonderland.
Jeezus....we have a bunch of hypnotized, naive, clueless folks who will swallow the latest bogus news reports. And NO...I'm not either of the two-party rank&file followers. I just want someone who understands and is willing to TRY and get us out of this gawd-awful mess we are in. Starting with the $15,500,000,000,000 freakin debt!
So like, given the aging baby boomers , were those Bush tax cuts REALLY necessary?? Why oh why did Bush fix what was not broken?