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Jumpstarting the Market: New Home Sales Up
By Jonathan Haeber
CMR Columnist
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Much of the recent news regarding new home loans and sales has been negative. People are holding off on mortgages -- partly because they expect the market to sour and prices to drop. September's stats prove that point. Sales increased above expected projections, mostly due to home price slashes by developers.
"September's results show the market works -- if builders cut prices enough, people will buy," Bart Malek, an economist for BMO Nesbitt Burns told MarketWatch.
Stabilizing Home Market, or the Calm before the Storm?
The recent increases may point towards a stabilizing market, though Malek still thinks this is just the beginning. "The pressure on the housing market will not end any time soon amid sky-high inventories and a deteriorating price environment." Others say a likely trend will emerge within the next sixth months. Many prospective buyers are waiting for the data to show before they buy, which further depresses the market.
Before You Decide on a New Home Loan
Before you decide to take out a new home loan, you should consider the market. Wait until further data is revealed to really decide to take out your mortgage. When it looks like buyers will begin a frenzy again, get in early for the best bets on home price appreciation.
Most real estate busts have lasted 5 years, at most. Some exceptions include Japan, which lasted as long as 20 years. Whatever the case, real estate is still a long-term investment, but most definitely one of the safest investments you can make, if you can wait it out.
Source
WSJ: New-Home Sales up 5.3% as Builders Slash Prices
About the Author
Jonathan Haeber is a marketing writer for Discovery Channel Stores. He recently purchased his first home, and took a self-taught crash course in home mortgages.
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