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Home Price Fall at 13 Year Max

An 18 year low in the percentage of existing home sales occurred in March 2007, contributing to the lowest overall sales rate since June 2004.  The figure are reported by the National Association of Realtors who stated the March sales of existing homes fell nearly 8.5%, turning in a seasonally adjusted annual figure of 6.1 million homes. This is the lowest level of house sales in nearly four years. 

The last time sales percentage declines were this high was in January, 1989, just prior to the beginning of a severe recession which blasted the housing market. Turning to resales, they don't look much better, sitting at just over 11% last year.

Economists state that the report was confirmation the the weakening of the housing market is continuing, although it's likely March's severe drop was at least partly due to inclement weather.  Prior to March's decline, sales had risen during four of the months preceding March.

It is believed that a continued level of home prices will eventually remove the support from consumer spending, resulting in a downturn in the economy.  The March reported sales at 6.1 million homes was lower than forecast. MarketWatch economists had expected a level of 6.45 million. 

The report provided a negative picture in the market but some economists felt that the details should have been expected, and that nothing appeared in the report was new information about the housing market. 

Federal lawmakers are concerned about the growing number of foreclosures due to subprime mortgages coming to due.  Legislators are discussing what they think should be done about the potential collapse of the credit markets and the housing market. One remedy would be reduce the rate of housing foreclosures.  Legislators are bracing for  the storm of subprime mortgages foreclosures which they expect , and trying to find a quick way to forestall them.

Of course, the fastest method for increasing overall housing market confidence is to lessen the foreclosure rate.

An upswing in the number of homes purchased would also reflect a growing rate of consumer market confidence, and with home prices dropping due to the increasing number foreclosures predicted, purchasing a home at a heavily discounted price is probably a good investment move.  Most real estate investors are holding off though, expecting that there will be even more bargains available as banks are forced to liquidate their pre-foreclosure holdings.  The glut of foreclosure and pre-closure homes available in some areas is as much as 25% of the total inventory.

OTHER REPORT FINDINGS

The median home price fell .3% relative to the March 2006 price.  This month the median price was $217,000.  This drop makes 8 straight monthly drops over one year ago.  These falling prices represent the single longest downward slope in 39 years.

Separately, a report regarding consumer confidence levels showed April's level was at the lowest since August 2006.  This reflects the third consecutive drop in the confidence level.  Consumers planning to purchase homes in the near future was at a ten year low point.