A weekly new home sales index often used by people in the business reported today that home sales continue to be flat. I was surprised to learn that the index from the exact same period las year showed only slightly better numbers, however, so it that time of the year for slower sales. It is not an encouraging looking graph with the number of home sales sliding down from the early part of the year to near its lowest point (the low point may have been last week.) Still, it was barely better than last week's figures.
This doesn't tell us a whole lot other than the market is still in a state of flux from the subprime lending fiasco, and the psychological impact of the bubble deflating. Many people fear they can't obtain a mortgage, so they don't even try. I have friends who are capable of getting financing, but have it already it their minds that now is not a good time to try because they will get turned down. This is a very unfortunate by-product of the subprime mess. It is the continuing cause of this malaise in the market. If affordability remains an issue, I think we may see more people heading to the 40 and 50 year mortgages. I think the time is coming when those are more the standard than our current system. We'll see what happens, but I think it is likely.
chris
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