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Listings of Bank-Owned Homes Pull Down New Home Sales in November

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By : John Cutts    99 or more times read
Growth in listings of bank-owned homes continues to take its toll on new home sales all around the U.S. For November 2010, the number of new residences sold was fewer than what economists projected for the month. According to industry experts, aside from foreclosures, new housing sales are also being hit by the high unemployment rate.

Analysts have stated that foreclosures are competing against new homes for buyers' attention. They added that the decline in distressed real estate investing in the past two months or so caused the number of unsold cheap foreclosures to be higher than before, making it even harder for builders of new dwellings to gain a bigger share of the home buying market.

Aside from the huge supplies of foreclosure properties auctions, the country's unemployment also continues to hover near the 10% mark, causing consumer confidence to decline and home buying activities to drop. New home purchases rose by 5.5% for the month compared with October, reaching a 290,000 yearly rate compared with the October Home pace of 275,000. Despite the monthly increase, the number is still lower than economists' projected figure of 300,000 for November.

Last August, new housing sales set a 274,000 annual pace and recorded the lowest trend since 1963. Economists predict that the slow pace will likely be maintained until 2011 as sellers of new residences will continue to have to deal with unemployment that is almost at its highest level in more than 25 years. In addition, listings of bank-owned homes are expected to rise further, with demand also expected to weaken as potential buyers face tighter lending rules.

Meanwhile, the number of people willing to buy repossessed properties and other existing properties increased in November to 4.68 million. The figure, however, is less than the total projected by economists, given that existing residential properties account for almost 90% of the total home selling market.

Although the actual figure is lower than what was expected, it is still better than the record low in July when only 3.84 million existing houses were sold as reported in most foreclosure magazine publications.

Most housing market analysts agree that the U.S. residential market has gotten over the worst part, but it would take years before it can return to normal, particularly with listings of bank-owned homes remaining at high levels.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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