December existing home sales crater
Sales of existing homes in December dropped by the largest percentage ever, as home buyers retreated from the market anticipating the end of the government home-buying stimulus.
Sales of existing homes dropped 16.7 percent in December, compared with November, the biggest month-over-month drop ever, the National Association of Realtors said moments ago.
Still, sales of existing homes in December were up 15 percent from December 2008, a reminder of just how bleak the 2008 market was.
And the median price of an existing home sold in December ticked up 1.5 percent from a year ago to $178,300.
The big December drop is a function of Congress's late action in extending and expanding the home-buyer credit that was set to expire at the end of November. First-time home buyers got an $8,000 tax credit. As that program was set to end, Congress extended it until the end of April. So January sales should see a bit of a bump. But the truth of the matter is, we won't know how healthy the home buying market is until all federal subsidies are withdrawn in April
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By
Frank Ahrens
|
January 25, 2010; 10:15 AM ET
Categories:
The Ticker
| Tags: National Association of Realtors, existing home sales, home sales
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Posted by: jeff77k | January 25, 2010 12:59 PM | Report abuse
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...and April will the be the first of many licks the housing market will have to take as the foreclosure assistance programs wind down, job creation stimulus winds down and the fed starts to raise interest rates again. The big drawback to these assistance programs is that they merely postpone the hit we have to take (with interest) to a later date.