New home sales in US tumbling

The Commerce Department have released a report that has forecast that new home sales have fallen this month for the sixth consecutive month, indicating that the market has yet to reach rock bottom.

New home sales have fallen by 0.6 percent from March, as 520,000 units were sold which is the fewest since September 1991.

Consumer confidence, especially in the housing market, is low as declining house prices and stricter loan rules are reducing demand. Furthermore, the high levels of foreclosures mean that there are even more readily available properties on the market.

House prices are tumbling across the country and at an accelerated rate at a period where consumers are facing an ever increasing cost of living are reluctant to be burdened with increased mortgage costs.

The National Association of Realtors said last week that existing home sales dropped by 1 percent to 4.89 million units which equals the all time low of 1999.

The current low prices attract bargain hunters although they drive away homeowners who see their home as their main investment. As a result, the market in now saturated with fence sitters who outnumber bargain hunters, and until prices drop further, this situation will remain unchanged.

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