Friday, September 24, 2010
Fewer U.S. new homes than forecast were sold in August, signaling the housing market remains depressed even as mortgage rates dropped.
Purchases were unchanged at a 288,000 annual pace, matching July as the second-lowest in data going back to 1963, figures from the Commerce Department showed today in Washington. The median price fell to the lowest level in more than six years.
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A jobless rate hovering around 10 percent will probably keep foreclosures elevated and dissuade some consumers from taking additional debt to buy houses. The inability of housing to rebound one year after the economic recovery began is among reasons Federal Reserve policy makers this week said they are willing to take additional steps to spur growth.
“There is no upside momentum in housing, period,” said Eric Green, chief market economist at TD Securities Inc. in New York who correctly forecast the level of sales. “Unemployment is so high, consumer confidence is so low, household wealth is eroded and the psychology remains negative.”
This article was posted: Friday, September 24, 2010 at 9:26 am