Are Homebuyers At Walk absent Price?

June 09th, 2008 | Category: Foreclosure

According to the Conference Board, consumer confidence is at its lowest in the final 16 years. Since 1982, consumers have not faced such a bleak future in terms of jobs and inflation. With housing prices at low ebb, gasoline costing more and inflation affecting food and medical bills, consumers are indeed tough hit.

This is reflected in the fact that fewer citizens are spending on high expenditure items like cars and homes. Consumers seem confronted with the walk absent prices for all sorts of goods.

With rising gas prices, 2007 saw fewer citizens using their own vehicles and resorting to public transport instead. Statistics from the American Public Transportation organization support that, showing a two percent increase in the usage of public transportation final year. In fact, the department of Transportation recorded that Americans drove 4.3 percent fewer miles in March 2008 than a year ago. that amounts to 11 billion miles less in the overall count. The Energy data Administration too anticipates a 0.4 percent fall in gas consumption as compared to final year.

As with gas consumption, a pullback has additionally been observed in the housing market. With fewer humans investing in homes the prices have fallen steeply. The Office of Federal Housing Enterprise Oversight (OFHEO) reported that housing prices went down by by 3 percent in the first quarter of 2008. In 43 states the purchase index reflected a fall in prices with California and Florida showing the highest decline. Wyoming, Utah, Montana, Texas and Alabama however showed an appreciation in home prices.

The purchase index bears testimony to the all

encompassing credit crunch as well as the fear holding the housing market in its grip, even in areas which are economically strong.

The trends reflected by the purchase index are meaningful. The calculation of the price declines are based on homes that have been purchased with conventional loans from the government sponsored Fannie Mae and Freddie Mac. These secondary market providers are overseen by OFHEO. that makes the report all the more meaningful as these calculations exclude volatile jumbo and sub-prime loans unlike other purchase indices.

The Commerce area offers a ray of hope in that situation. According to it, April 2008 saw new home sales going up by by 3 percent. Although that figure is still 42 percent less than what it was at the same day final year, it is an optimistic sign. And perhaps, home buyers are not at the walk absent price yet.