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Tuesday, September 28, 2010

Home Prices Probably Cooled, U.S. Consumer Sentiment Off


Unemployment close to a 26-year high, the absence of a government incentive for buyers and an increase in foreclosures are weighing on the housing market. Depressed home values and a lack of employment opportunities may keep limiting confidence, holding back consumer spending, which accounts for about 70 percent of the economy
Home building usually leads the country out of recessions, but it's not happening this time due to the over building of real estate.  Also
A government tax credit of as much as $8,000 gave housing a temporary lift in late 2009 and early this year and helped prices stop falling. The incentive required contracts be signed by the end of April. Since then, the industry has struggled, helping explain why builder shares are depressed.
This tax credit has done nothing, but to increase home sales in the beginning of the year.  But that has taken away sales from the second half of the year.

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