Yesterday Ed Morrissey posted an article at Hot Air about the latest report to come out on the housing market. The National Association of Realtors reported that the market for both new homes and existing homes went down in March. March was the third month out of the past four months when sales of existing homes have gone down.
The article reports:
Residential real estate remains the economy’s soft spot, challenged by stricter lending standards, lower home values and the threat of more foreclosures. An improved labor market and mortgage rates near historic lows have yet to stoke bigger gains in demand.
The article further states:
The description of an “improved labor market” applied more in February than it did in March. Last month, the US only added 120,000 jobs, barely enough to keep up with population growth. Even before that, the previous three months added around 650,000 jobs in the aggregate, which means actual growth above population increase of about 300,000 jobs — which wouldn’t greatly increase demand in the housing market, but shouldn’t result in a decrease in demand. First-time buyers still only account for a third of these purchases, when the normal level is around 40%, according to Bloomberg News. That’s an indication of a lack of confidence among younger adults.
I am not an economist, but it seems to me that until people feel they have secure jobs, they won’t buy houses. I also wonder if the fact that it used to cost $30 to fill up a gas tank and now costs $60 might have people saving their pennies in case things get worse.