Purchases of new
homes in Idaho and the US jumped more than forecast, helping demonstrate the first signs of rebound from the worst recession since the 1930′s. The window of historically low mortgage rates and
home prices is narrowing; while that is good news for the economy it may signify that the best time in years to
purchase a home in Idaho may soon be history.
Home sales increased 9.6 percent in July, the most in four years, to a 433,000 annual pace according to figures from the Commerce Department. Other reports from the department indicate bookings for durable goods climbed 4.9 percent, showing a rippling effect throughout the economy as a whole.
Government efforts to thaw credit markets and revive demand are stemming the biggest housing slump since the Great Depression. Reports on orders signal business investments picking up and this has triggered economists at Morgan Stanley to lift growth estimates for this quarter.
“We might be seeing a broadening-out of the economic recovery,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “That makes growth more sustainable. The stimulus is providing a floor.”
Many economists forecast
new home sales will rise to a 390,000 rate, according to the median of 71 projections in a Bloomberg News survey.
July’s sales pace was the highest in 10 months and exceeded all estimates, which ranged from 365,000 to 420,000.
Lower Home Prices
Median home prices of new homes decreased 12 percent to $210,100 from $237,300 in July 2008. Sales of new homes were down 13 percent from a year earlier. This jump in sales was led by a 32 percent surge in the Northeast. Home purchases increased 16 percent in the South and 1 percent in the West.
Home builders had 271,000 houses on the market last month, down 35 percent from July 2008 and the fewest since March 1993. It would take 7.5 months to sell all homes at the current sales pace, the shortest time since April 2007. With home sales responding to policy efforts such as an
$8,000 tax credit for first-time buyers; the Fed keeping its benchmark interest rate near zero and central bank purchases of mortgage-backed securities to free up funding for housing.
“We’re likely not to experience a lot of downside from here,” Pulte Homes Inc. Chief Executive Officer Richard Dugas said. “It could remain a ‘tough environment for a while…’” he added.
Some economists warn that the magnitude of the gains in housing is not likely to be maintained after the first-time buyer credit expires at the end of November.
“I think we will see a drop-off in sales, the question is how large the drop will be,” Patrick Newport, an economist at IHS Global Insight, said in an interview on Bloomberg Television. “I don’t think anyone has a good handle on it.”
Don’t miss out on some of the
best real estate market conditions in years! There is no better time to
invest in real estate by purchasing a home in Idaho. Contact Kecia & Co. today to get in on this unique time in history to invest in your future through the purchase of a new
home in Idaho!
