Housing Market Wobbly, Despite Optimism
Given the importance of the housing market to the nation's balance sheet, it's no surprise that many observers are looking for any evidence that prices on family homes have finally bottomed out. For those watchers, Nov. 2 had a bit of good news: The National Association of Realtors reported that its index of sales agreements for previously occupied homes rose 10.4 percent in October.
But that positive statistic must be placed in a longer-term context of declining prices, bulging inventories of unsold homes and ongoing legal improprieties in the nation's foreclosure machinery. And against that background, the NAR's news doesn't feel all that impressive.
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The rise in sales agreements is also clouded by reports that new-home sales fell 8.1 percent in October to a seasonally adjusted annual pace of only 283,000, a near-record low, while existing-home sales declined 2.2 percent to an annual rate of about 4 million. In the third quarter, home sales tumbled 25 percent to a 4.16 million seasonally adjusted annual pace from the previous three months, a rate that was 21 percent below the 5.28 million clip of 2009's third quarter.
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