Dec Home Sales Down Almost 17%

Dec. home sales down almost 17% - Washington Times

Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, sinking more dramatically than expected after lawmakers gave buyers additional time to use a tax credit.

The report reflects a sharp drop in demand after buyers stopped scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on Nov. 30, but Congress extended the deadline until April 30 and expanded it with a new $6,500 credit for existing homeowners who move.

"It's 'exit stage left' for first-time homebuyers," wrote Guy LeBas, an analyst with Janney Montgomery Scott.

December's sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million, from an unchanged pace of 6.54 million in November, the National Association of Realtors said Monday. Sales were expected to fall by about 10 percent, according to economists surveyed by Thomson Reuters.

The report "places a large question mark over whether the recovery can be sustained when the extended tax credit expires," wrote Paul Dales, U.S. economist with Capital Economics.

The median sales price was $178,300, up 1.5 percent from a year earlier and the first yearly gain since August 2007. However, some of that increase could be due to a drop-off in purchases from first-time buyers, who tend to buy less expensive homes.

The big question hanging over the housing market this spring is whether a tentative recovery will stumble after the government pulls back support. The Federal Reserve's $1.25 trillion program to push down mortgage rates is scheduled to expire at the end of March, a month before the newly extended tax credit runs out.

Last year, first-time buyers were the main driver of the housing market, but their presence is on the decline. They accounted for 43 percent of purchases in December, down from about half in November, the Realtors group said.

Click to expand...

Some comments:

1. December was the darkest month.

2. Twelfth Month's Jobs Report was dire---unexpected, disappointing, a REVERSAL of previous declines and, therefore, most OMINOUS projecting forward.

3. The bleeding, staunching slowly thru Autumn, suddenly and seriously swiftened in Spending Season.

4. Retail sales in December, same thing---surprisingly sore and wending the wrong way.

5. Foreclosures, too---UP 14% over November, yet another measure of malaise.

6. Now, this---home SALES in dour December DOWN 17%, the worst showing for real estate since 1970 when submerged homeowners famously gave away their house keys to strangers.

7. As experts have been prophesying quarter after quarter, each historically worse than any recorded, the bottom of the critical HOUSING MARKET is still to be sighted.

8. December's dreadful drop, mind you, comes DESPITE the 8000 dollar credit doled out by our dogmatics in DC.

9. A tax CREDIT, subtracted straight from some sucker's excise, is worth something on the order of 4 times the value of any equal DEDUCTION (think about it).

10. The stimulus stumbled.

11. TARP tripped---his sudden need to TAX banks to "get our money back" is tacit admission.

12. To FORCE folks to LEND by PUNISHING them.

13. LOL!

14. His $75B mortgage relief program kerplopped.

15. Indeed, the terms of TARP are so terrible they must be treated as TOP SECRET, national security status, by the secretive SEC.

16. His measure empowering bankruptcy judges to revise mortgage terms similarly missed its mark.

17. The populist is a putz.

18. What's more dear to hearts than homes?

19. And what's gonna happen in April, Eliot's cruellest month, when the CREDITS expire?

Rise in jobless claims signals bump in recovery - Yahoo! Finance

December retail sales drop 0.3 percent - Yahoo! Finance

My Way News - Record year for foreclosures as unemployment rises

Moneynews - Experts: Obama?s Mortgage Relief Program a Failure