Home Sales Begin to Stabilize Heading Into Spring
The slow pace of economic recovery has continued to take a toll on the housing market in recent months. The most recent evidence comes from home purchase contracts in New Jersey during December which registered their 8th consecutive year-on-year decline since the deadline for qualifying for federal homebuyer tax credits expired last April 30th. Despite the continuing slump however, the last 2 months have seen the smallest drop in purchase activity over that 8 month period with a 10% drop in November and December compared to an average 27% decline for the period from May through October. Also noteworthy is that those recent modest declines are based upon a comparison to year ago levels when the tax credits were still in play. These trends suggest that the combined effects of lower home prices and cheap mortgage rates have rebalanced housing affordability to the point where meaningful job creation is the only missing ingredient for market stabilization.
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