According to a new study released today by the Center for Housing Policy, buying a home still remains outreach for many workers despite historically low mortgage interest rates and steep drops in home prices.
Entitled Paycheck to Paycheck: Wages and the Cost of Housing in America, the study compares and ranks the costs of buying or renting a home in more than 200 U.S. metropolitan areas with salaries for over 60 occupations.
Even still, despite better prices the study found that while the income needed to purchase a median-priced home dropped in 93 percent of the homeownership markets many workers still do not earn enough to own a home.
Deep discounts or not, according the group, housing is still too expensive.
That’s why no one should really be surprised by the existing home sales figures released this morning by the National Association Realtors(NAR).
According to the NAR, sales of existing homes fell in for a third month in February, casting even bigger doubts on the spring selling season.
From the AP by Martin Crutsinger entitled: February existing home sales drop 0.6 percent
“Sales of existing homes fell for a third straight month in February, pushing sales down to the lowest level since last July. There is concern the fragile housing rebound is faltering, making it harder for the overall economy to recover.
The National Association of Realtors said Tuesday that sales of previously occupied homes dropped 0.6 percent in February to a seasonally adjusted annual rate of 5.02 million.
The weakness in sales depressed prices with the median home price dropping almost 2 percent from a year ago to $165,100.
In fact, sales nationally have been declining since November, eroding gains made over the summer. The downward direction troubled economists because the government has taken unprecedented steps to support the housing sector.
To keep mortgage rates low, the Federal Reserve has spent almost $1.25 trillion. In addition, Congress extended a deadline for homebuyers to qualify for tax credits. Both programs are set to end soon.
High unemployment and tough lending standards appear to be holding buyers back. That could derail housing as it tries to emerge from the worst downturn in decades and harm the overall economy.
“Until job growth resumes, housing demand will remain weak and susceptible to another lurch down when the homebuyer tax credit expires in April,” said Sal Guatieri, an economist at BMO Capital Markets.
Last month, the inventory of unsold homes jumped by 312,000 to 3.59 million, an unusually large increase that pushed the supply of unsold homes to 8.6 months.
Lawrence Yun, chief economist for the Realtors, called that increase “discomforting” and said if it climbs above 10 months supply it could put significant downward pressure on prices.”
Let the double dip begin…..
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The 2010 Housing Market “Shadow Inventory”
Underwater Homes Trap Borrowers into Higher Rates
FHA Defaults: Many More on the Horizon
Mortgage Delinquencies a Set New Record
The Brewing Trouble at the FHA
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