by Office Staff
on Wednesday, September 24th, 2014 at 11:17am.
According to statistics, during the month of August, only a few Americans bought homes as compared to the previous months.
Likewise, according to the National Association of Realtors, the sales of existing homes dramatically fell by 1.8 percent and the annual rate seasonally adjusted to 5.05 million. This resulted in a four-month streak of gains as the sales from August to July dramatically fell and it was something unexpected.
Moreover, as compared to last year, where there was a 7 percent of August purchases, it went down to 12 percent and even the investors became skeptical and refused to buy properties, because they're afraid to experience the effects of housing busts, as well as recession.
In a nutshell, it has been noted that the pace of home sales continues to drop by 5.3 percent every year.
For analysts, the housing sales that triggered the recession continues to go downhill. In fact, even the Americans who own homes gradually became lesser over the year, and this could be the result of the 5-year recovery that took place. Thus, more and more Americans opt for renting homes, in order to prevent the negative drawbacks brought by the recession. With that, the ownership rate fell to 64.7 percent, from 69.2 percent in 2004.
This year, most sales were held by the winter storms. However, throughout the summer, it slowly accelerated once again as the mortgage rates continue to increase. This kind of combination didn't have a good effect on the house sales, but it just made it worse. Furthermore, the rising prices that happened last year and the weak income growth threatened a lot of buyers, that from the average 40 percent, it went down to 29 percent.
However, over the past 12 months, it has been noted that the median sales price of $219,800 rose up by 4.8 percent, but it slightly slipped down once again during August. This effect continues to take place since last year and the annual sale of 5.5 million remained stable. A lot of people perceive that the home sales are the missing link for a solid economic recovery, but the problem is that it continues to disappoint the market according to analysts.
Nonetheless, indicators heading into the fall and winter gave a mixed impression on the real estate.
As for the month of August, the home construction plunged by 14.4 percent and it's considered to be relatively low as compared to the prior month. This was the result of a drop-off in building apartment complexes. Though, it's also been said that even the single-family home construction also fell by 2.4 percent.
According to the National Association of Home Builders and Wells Fargo, the sentiment index climbed in September, and it reached the highest point during November.
Despite this positive change, the incomes stay weak, making it more complicated for buyers to save for a down payment. Additionally, according to the Census Bureau, the median household income was around $51,939 last year and it's 8 percent lower as compared to 2007-- when the recession took place.
Lastly, based on the company, Freddie Mac, the average rate of mortgage rose to 4.23 percent from 4.12 percent. Though this statistic remains unstable.