May 29, 2007

Existing home sales fall to 4-year low in April
Supply of homes on market rises to 15-year high

The bottom of the housing sector is not upon us," said Bill Hampel, chief economist for the Credit Union National Association. The inventory of unsold homes on the market increased 10.4% to 4.20 million, an 8.4-month supply at the April sales pace, the largest supply in 15 years. Some of the gain should be seen as a normal increase for the spring selling season; the inventory data are not seasonally adjusted.
"The inventory figures are abysmal," wrote Tony Crescenzi, chief bond market strategist for Miller Tabak & Co., who said inventories are about 1.6 million higher than normal.
The sharp rise in inventories could show that sellers are testing the waters, said Lawrence Yun, senior economist for the real estate trade group.

Mechanics of a Stabilizing Housing Market

While the pace of state existing-home sales is still below the level a year ago, the latest statistics show that more states are showing improvement in sales of previously owned homes. NAR's first-quarter 2007 data indicates that 14 states and the District of Columbia posted increases in the sales pace compared to a year ago, up from only six states showing gains in the fourth quarter report. Prices, meanwhile, continue to favor buyers. NOTE: This article has a good breakdown of existing markets and how they vary in this slowdown and some good insight into the condo markets.

Why a Mortgage May Be Your Best (and Worst) Move
By Jonathan Clements

Playing the spread. If you need to borrow, you will be hard-pressed to do better than a home loan. Not only are interest rates typically low, but that interest is usually tax deductible. To get a mortgage, you need to own a home or agree to buy one. But once you have that debt, the effect is to leverage all your assets. That can be highly profitable.

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