Who was it who said "there are lies, damned lies and statistics"???
For April 2010, the Commerce Department claimed 42,000 new single-family home sales. That's an annual rate of 504,000… and a 15% increase over March levels. In May, it counted only 25,000 new home sales. In addition, they revised the April numbers down to 37,000 and revised March's numbers down by 4,000 to 32,000 after people backed out of their agreements.
What matters is that May 2010 was the worst month for new home sales in America since record keeping began in the early 60's.
The Commerce Department says the average sales price for these new homes was $200,900 - that's a new seven-year low, down 10% from a year ago, and 22% from the all-time high in June 2006.
Thirty-year "A" paper fixed mortgage rates dropped to 4.69% last week, yet applications fell to the lowest levels seen since 1997.
As icing on the cake, a Realtor friend who has sold a few of these "tax rebate homes" suspects that at least half of these recent buyers will end up defaulting, just adding to the foreclosure mess. She says most of these buyers don't fit the profile of someone who can weather an economic storm. (As anecdotal support for that hypothesis, one in ten mortgages in America experienced at least one late payment in Q1 2010.)
It's not over, and there's nothing we can do but watch. It must feel rather similar to live in Oklahoma without a tornado shelter, with a storm approaching...
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