From the AP:
Hoped-for end to tumbling housing market appears pushed back by the latest sales data
Homeowners and investors hunting for any indication that the housing market has bottomed out did not get it Tuesday, as the latest home sales data from a real estate trade group moved that sign further down the road to recovery.
With house prices falling and credit continuing to tighten, many economists say the housing market is likely to worsen in the coming months, though some remain hopeful about a recovery in the second half of the year.
“The question was whether things were starting to stabilize,” said Global Insight economist Patrick Newport. “Apparently they’re not.”
Newport predicts home sales will fall by another 5 percent to 10 percent before picking up at the end of the year, while the Realtors group forecasts sales will remain flat in the first half of the year before rebounding strongly in the second half.
Moody’s Economy.com forecasts sales of existing homes will fall 1.6 percent in March to an annual rate of 4.95 million units, down from 5.03 million units in February. That month’s 2.9 percent increase in home sales was the first increase since last July.
“Despite recent steps to provide more liquidity to the mortgage market and ease financing constraints for potential buyers, access to credit remains restricted, especially for marginal buyers,” Aaron Smith, senior economist at Economy.com, wrote. If job losses prove worse than expected as the economy slows, “the floor forming under home sales could begin to cave in.”
Some analysts say lower home prices are luring bottom-fishers to look for cheap deals, but that activity is not a guaranteed industry booster.
“We’ll have to see if these pending transactions can actually close,” Mike Larson, a real estate analyst with Jupiter-based Weiss Research said in an e-mail. “My concern is that stingier lending standards are leading to more deals falling apart.”