The depth of the decrease in sales being at its lowest was shocking and depressing for the Real Estate industry after the homebuyer tax credit lapsed at the end of April.
We’re not creating jobs and because of this, the housing problems now are being driven by broad economic problems everyone is at a struggle for better financial position at this time and this is affecting sales big time. It was reported that this is the biggest monthly decline and that the index is at its lowest level since 2001 after the tax credit expired.
According to the National Association of Realtors (NAR), pending home sales fell a whopping 30% in May. Their index, which measures signed sales contracts but not closed sales, plunged to 77.6 from 110.9 in April. It’s even off 15.9% from a year ago when the nation was barely emerging from the recession.
Customers rushed into deals to claim the credit, borrowing from May sales. Once the economic recovery comes into full swing, housing markets will heat up.If more jobs come back as expected, number in home sales should pick up later this and reach a sustainable level of activity given very favorable affordability conditions. Some of those conditions include much lower home prices and extremely favorable mortgage interest rates. The question is when — or if — the job market will ever bounce back.