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Realistbear

Sinking House Sales In January

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http://abcnews.go.com/Business/wireStory?i...TC-RSSFeeds0312

By MARTIN CRUTSINGER AP Economics Writer

WASHINGTON Feb 27, 2006 (AP)— Sales of new homes fell for the second time in three months in January, providing further evidence that the nation's five-year housing boom is slowing.
The Commerce Department reported Monday that sales of new single-family homes dropped by 5 percent to a seasonally adjusted annual rate of 1.233 million units last month.
That was a bigger drop than analysts had been expecting and provided support to the view that the housing market, after setting sales records for five straight years, is slowing under the impact of rising mortgage rates.
The 5 percent January drop in sales followed a revised 3.8 percent increase in December and was the biggest setback since a 7 percent drop in November.
Despite the fall in sales, the median price of a new home was up in January to $238,100, compared with $229,000 in December.
The median is the point where half the homes sold for more and half for less. The January figure was the highest since an all-time high of $243,900 set in October.

Same phenomena going on in the UK? Sales numbers are down (See thread on HM Customs and Excise stats that show January transactions down on December) yet prices appear to be rising? Supply and demand conundrum or is there an explanation?

It is possible that fewer houses are selling at the same time as prices are rising because it is the top end of the market that is bailing first. Could it be that the rich and savy investors are dumping their expensive homes before the sheeple catch a whiff of the coffee?

This story just in from the AFX

http://www.iii.co.uk/news/?type=afxnews&ar...&action=article

WASHINGTON (AFX) - Sales of new homes in the United States fell 5% to a seasonally adjusted annual rate of 1.233 million in January, the lowest in a year, the Commerce Department said Monday. The number of new homes on the market increased 2.5% to a record 528,000, representing a 5.2-months supply at the January sales pace. The months' supply is the largest in nine years. Sales in December were revised higher to a 1.298 million pace from 1.269 million previously estimated. Economists were expecting home sales to remain level at about 1.27 million. The median sales price increased 6.7% year-over-year to $238,100, which is exactly the median price for all of 2005.

Sounds like crash conditions? Largest supply in NINE years? :o

Edited by Realistbear

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it will be different here in the UK! :lol:

Did I read somewhere that the majority of mortgages in the US are long term fixed rate?

whereas in the UK...

Not this time around. In the largest market, California, over 80% of mortgages have been "creative" loans: IO and balloon loans. To get a "conforming loan" in the US (fixed for 15/30 years) the banks have stricter lending criterea--usually 3-4 times proven income. Creative loans are often what are known as "no documentation" loan or self assessment where anything goes and usually does.

The UK and US markets are remarkably similar with very similar rates of increase. In the Great Crash* both markets went up and down together. No reason to suspect it will differ much this time around.

*1989-96

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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