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New Home Sales Plunge Despite Price Drop

Experts say this is the best year to buy a home, but new data suggests most of us would rather hang on to our money. The U.S. Department of Commerce reported that sales of new homes fell lower than expected last month, although the median price has dropped by over $20,000.

Home sales for January hit a low of 309,000, a drop of over 10% from December’s reading. This largely exceeded economists’ expectations of about 2.1%. Meanwhile, inventories increased in pace to a record 13.3 months, moving up from the revised reading of 12.2 months last December.

The plunge is felt across most of the country, although some regions were hit harder than others. Western states saw new home sales drop by 23,000 from December to January, while the Midwest and Northeast experienced a milder drop of about 3,000.

New homes now go for just above $200,000, whereas the prices in December averaged $223,000. The annual average has fallen by 13.5%, a sign that fewer people are willing to part with their savings, even for a seemingly good deal.

Real estate experts say it’s still a good year to take out new mortgages, especially with the government’s plan to support increased lending activity. Borrowers with good credit and a stable job can take advantage of lower rates from major banks. Those struggling with high mortgage, on the other hand, can avail of loan modification and other assistance programs lined up in the new housing reform plan.

 

Earlier in Short Sale News:
New Government Program to Encourage Short Sales
New Government Program to Speed Up Short Sales
Lenders Becoming More Open to Short Sales

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