"Sales of existing homes took an unexpected plunge from December to January, falling to the lowest level in nearly 12 years as pessimism about the economy grew and buyers waited to see how the new government would help revive the US housing market."
It must take a lot of intestinal fortitude to buy a home with all the uncertainty created by an intrusive federal government sending mixed and incoherent signals that paralyze investors and potential homeowners alike. It also doesn't help that Barack "Eeyore" Obama is constantly predicting doom in order to justify more incompetent government meddling in the economy.
But we have good news on the supply side of the equation:
"The number of unsold homes on the market last month fell almost 3 percent to 3.6 million, the lowest inventory level in two years. But due to the slumping sales pace, it would still take 9.6 months to rid the market of all of those properties, up from 9.4 months in December."
A healthy market should have around a six month supply. But as I posted earlier, this number should start coming down consistently as new construction has stalled and foreclosure rates will fall. In other words, there is very little new supply of homes coming to market and what little demand there is will pressure prices to rise or at least stabilize.
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