Home sales have been softer than analysts have predicted, and it’s really no surprise.
Prices aren’t really that attractive, even with all the home price declines; affordability is only historically high because mortgage rates are at record low levels.
That’s one reason I don’t see mortgage rates rising anytime soon; wouldn’t want to dampen affordability, especially if nobody is buying to begin with.
Then there’s the fact that prospective buyers don’t have any money, as evidenced by a poll of both current home owners and renters, conducted for the National Association of Home Builders (NAHB).
About one-third of renters who responded intend to buy a home in the “near future,” but 39 percent said they don’t have the money to buy right now. Uh oh.
Another 20 percent said they don’t think they can qualify for a mortgage, and 18 percent said job security is the greatest concern.
Oh, and 29 percent of current homeowners interested in buying a new home say their inability to sell their current home is the biggest obstacle.
There’s also the worry that the value of a new home might fall after the purchase is made, and many believe home prices are still just too high, even with that homebuyer tax credit set to expire in a couple months.
I for one, agree. That’s why I said there’s no rush to buy a home, still too much downside risk in my opinion.