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Stimulus expiration affects new home sales

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By : vithya coumar    99 or more times read
As the New Year rings in, new home sales figures are declining. As all of the data for 2009 piles in one area, new homes sales seem to be taking quite a hit. The Commerce Department is reporting that figures are down as low as 11%.

The fear is that as Federal Tax incentive programs begin to expire in April 2010 and the housing market will once again be on its own and start to show unfavorable numbers once again.

Since all financial markets are used as a measuring stick for the health of the economy, it is the hope of all that the recently reported U.S. personal income increase of 0.4% adjusted after inflation would keep hopes high as a possible sign that the economy is headed in the right direction. The increased payments made by the government through wage and salary payments are a well needed boost directly to the public and the economy.

With the numerous amounts of foreclosed properties that will be hitting the market in the 1st quarter of 2010 it is unlikely that the number of new homes sales will see a spike until later on in the year. The housing market will be flooded with great deals, as banks and lenders try to off load returned properties. Any buyer that is looking to get into a home at market bottom prices will most likely stick to buying a pre-owned home due to the amount of deals that are going to be out there.

The National Association of Realtors estimates that by late 2009 nearly 6.54 million previously occupied homes were sold. This is the highest reporting in nearly three years. New home sales generally account for 15% of the total number.

Year end reports on consumer spending and personal savings rates seem to be increasing ever so slightly. These positive numbers reflect what most economist are not willing to outright say and that is that 2010 will be known as the year of reemergence from a recession that cost billions of dollars and changed the way we buy houses.
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