Considering growing the family? Sell the old house first!
According to the National Association of Realtors (NAR) it will currently take longer to sell your average home than it does to have a child. The NAR said in a press release issued this morning, that by the end of July:
- inventory of (existing) homes available for sale had reached 9.6 months of supply and
- median (existing) house prices had fallen 0.6% to $228,900 since last July.
A few sacred cows were slaughtered with this news. A 2004 report co-authored by then Chief Economist for NAR, David Lereah, concluded that “there is little possibility of a widespread national decline since there is no national housing market.” That assumption is based on the principle that “all real estate is local” but industry pundits now realize that trends in lending, responsible for much of the demand in housing, are indeed national. This news shouldn’t surprise regular readers; Zillow has measured a nation-wide reduction in home values since the final quarter of 2006.
The second sacred cow did surprise me. It’s a common assumption that the ailing housing market is just a few good rate cuts away from recovery. NAR’s press release suggests otherwise and states that the cost of a mortgage is more favorable today than it was a year ago; “According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.70 percent in July, up from 6.66 percent in June; the rate was 6.76 percent in July 2006.”
It’s natural to wonder where the market is headed and where it will be by year’s end. What do you think?




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