NAR Predicts First Home Price Decrease in Over a Decade

Don’t be dismayed by the current state of home prices, hopeful owners, there’s good news on the way:

The National Association of Realtors forecasts a drop in U.S. home prices for the first time since 1993. Combined with a record number of homes , this development would give for sale gives buyers/Florida home loan applicants a major advantage over sellers.

“We’ll probably see prices dip temporarily below year-ago levels as the market works through a build up in housing inventory,” David Lereah, NAR’s chief economist, said.

The inventory of new and existing homes for sale has swelled to record levels as the five-year U.S. housing boom comes to an end. Shares of U.S. homebuilders fell almost 6 percent in the last two days, as previously covered.

Those who had taken out a Florida home mortgage in hopes of “flipping” a property for a profit are putting their houses up for sale, making for “an increasingly challenging housing market,” KB Home Chief Executive Bruce Karatz said in a statement yesterday that detailed the builder’s 43 percent drop in new orders.

Flippers get burned in Florida housing market

“People who purchased last year with the intent of flipping are likely to get burned,” Lereah said in the NAR report.

The last time the monthly U.S. median price for an existing home fell below the year-ago level was February 1993, when it dipped 1.1 percent. On Sept. 25, the group will report existing home prices and sales, which represent about 85 percent of U.S. housing sales.

The Federal Reserve said in an Aug. 8 statement that “cooling” in the housing sector is weakening the economy.” As a result, it ended a series of 17 consecutive Florida mortgage rate increases. Home sales and ancillary purchases, such as new furnishings and renovations account, for as much as 23 percent of GDP, according to the Joint Center for Housing Studies at Harvard University in Cambridge.

“Housing markets and home construction activity weakened throughout the nation,” the Fed said yesterday in its regional survey, known as the beige book. The slump could deepen “in the months ahead,” the report said.
Which just means you, the buyer, will continue to have the upper hand. Submit our FREE form now and take advantage of it.