U.S. Home Sales Fall Off A Cliff

Single-Family Home Sales In 2007 Plunged By Largest Amount In 25 Years

(AP)  Sales of existing homes fell in December, closing out a horrible year for housing in which sales of single-family homes plunged by the largest amount in 25 years. The median home price dropped for the entire year, the first time that has occurred in four decades.

The National Association of Realtors reported that sales of single-family homes and condominiums dropped by 2.2 percent in December to a seasonally adjusted annual rate of 4.89 million units.

For the year, sales of single-family homes were down by 13 percent, the biggest drop since a 17.7 percent plunge in 1982. The median price for a single-family home dropped 1.8 percent to $217,000.

That was the first annual price decline on records going back to 1968. Lawrence Yun, the Realtors' chief economist, said it was likely that the country has not experienced a decline in housing prices for an entire year since the Great Depression of the 1930s.

The new figures underscored the severity of the slump in housing, which has been battered for the past two years after enjoying a boom in which sales set records for five consecutive years.

The housing bust has sent shock waves through the entire economy as defaults have risen, resulting in multibillion-dollar loses for big financial firms whose investments in subprime mortgages have gone sour.

There is a concern that the housing and credit troubles could be enough to push the country into a full-blown recession. After global stock markets experienced a sharp sell-off earlier this week, the Federal Reserve announced a bold three-quarter point cut in a key interest rate and held out the promise of more rate cuts to follow.

The Bush administration and congressional leaders have reached a tentative deal on a stimulus package in an effort to boost consumer and business confidence.

For December, sales were down in all regions of the country. Sales fell by 4.6 percent in the Northeast, 1.7 percent in the Midwest, 1 percent in the South and 2.1 percent in the West.

The inventory of unsold homes dropped by 7.4 percent, raising hopes that backlogs that had hit record levels were starting to be reduced, a key factor necessary to prompt a rebound in the market.

While Yun said he expected sales to start to rebound this spring, other analysts said housing is likely to remain in the doldrums throughout most of 2008, reflecting in part the credit crunch, which has caused lenders to tighten their standards, making it harder for prospective buyers to qualify for loans.

In other economic news, the Labor Department said Thursday that the number of laid off workers filing claims for unemployment benefits fell for a fourth straight week, dropping by 1,000 to 301,000.

Many economists cautioned that they still expected layoffs to start rising in coming weeks, reflecting the sharp economic slowdown that has taken place.

The economy, after racing ahead at an annual rate of 4.9 percent in the July-September quarter, probably slowed to a weak 1 percent rate in the final three months of 2007 and may even fall into negative territory in the current January-March quarter.

A recession is often defined as two consecutive quarters of falling economic output. Many economists believe the risks of a full-blown downturn are roughly 50-50.

The growing worries about the economy in an election year have captured the attention of President Bush and congressional leaders who are working to put together a $150 billion economic stimulus package that will include tax relief for households and businesses in an effort to bolster economic activity.

The drop in unemployment applications to 301,000 for the week ending Jan. 19 left total claims at the lowest level since 300,000 were recorded during the week of Sept. 22.

For the week of Jan. 19, 36 states and territories had increases in claims while 17 had declines.

The biggest increase occurred in California, up 27,194, an upsurge blamed on higher layoffs in construction and service industries, and Florida, with an increase in layoffs of 8,496, which was attributed in part to higher layoffs in construction. California and Florida have been particularly hard hit by the housing slump.

[gunnerv1]

The sorry state that this has brought forth was all because of Greed!

[slim1h2o]

There are just too many for it to be that they were just stupid.

Posted by luvNY at 11:59 AM : Jan 24, 2008

It''s a combination of all of what you said. But also, I blame the banking industry more. They know what you can afford, and what you can''t afford.

And with the down turn of the economy,, hasn''t helped either.

[Krazcarl]

It''s simple economics you can''t buy what you can''t afford, Renting is becoming the way to go 0 maintance no taxes it''s all the working man can afford money is tight were either dumping it overseas or buring it in the bank or stocks,

[escher417]

And what does the Federal Government offer us as a solution to the increasing economic worries...a check...that serves no purpose but to steal from a later generation and will do nothing to create jobs or fix the economy (businesses do not change their practices due to a known temporary blip in sales).

If anyone is interested in real solutions to our economic troubles, check out:

http://www.ronpaul2008.com/Prosperity

Essentially saying that we need to actually reduce the federal spending so taxes can genuinely be cut and _real_ money over the long term can be placed in the hands of everyone.

For more solid ideas on how this country should be run, check out Ron Paul''s site at:

http://www.ronpaul2008.com/

And, don''t forget to donate:

https://www.ronpaul2008.com/donate/

[mrconservatv]

A recession is often defined as two consecutive quarters of falling economic output. Many economists believe the risks of a full-blown downturn are roughly 50-50.

Rising numbers of all foreclosures will put pressure on lending institutions to ... the lion%u2019s share of foreclosure activity; an average of 81% nationwide,

For millions of Americans the recession has already started.

Example- if a person loses there home that is recession

Example- if a person loses their job and pays Avg, 80,000 with benefits and the jobs to replace that job pay 35,000 with benefits that''s a recession

Example- Working families avg grocery/utilities/living expenses have gone up 35% over a five year period and income has either stayed the same or dropped by as much as 40% that''s a recession

Working Americans don''t need a bunch of Coat and tie wearing freaks defining a recession to them.

[easeup-2009]

Buddha

Talk about karma--those lenders who gave non-qualified borrowers ARM''s & interest-only loans knowing full-well in 4-5 years these people would be fvcked are now in the fetal position on their office floor waiting for the phone to ring.

Grant it, the consumers who buy more house than they can afford share the risk, but it is nice to see these mortgage sharks (who are no better than car or furniture salesmen) get screwed.

Actually, right now fixed rates are pretty *** low--they''re a point below where I''m at now so I might refinance & save myself $180-$200/ month.

[buddhabman]

Greedy Speculators, Flippers, Over Zealous Developers, Unscrupulous Mortgage Bankers, not quite as smart as they thought Wall Street Bankers, and just to much house for many people to afford. This will get better but it''s gonna be a bit painful. The good side is development will slow down, houses will get smaller, prices will be more afordable.

I don''t blame Bush directly for the housing crisis but this is another problem that has cropped up on his watch. Again the Iraq war takes away resources and focus on the issues that matter hear at home.

To all you Bush / Republican apologists, all I have to say is - Where is Osama Bin Laden?

[luvny-2009]

Am I nuts or what, all I hear is that it''s the people''s fault for getting in over their heads. I just can''t believe that it''s that cut and dry. People had to have been lied to, lost jobs and hiugher bills from gas proces or something. There are just too many for it to be that they were just stupid.

[easeup-2009]

Overheard at Countrywide:

"TURN THOSE MACHINES BACK ON!! TURN THOSE MACHINES BACK ON!!!"

[rushman71]

"Now you can buy homes for as little as pennies on the dollar!!!" LOL