A Great Time To Buy Homes in The USA
06/12/2007

With sales of new homes enjoying a surge in April, buyers are beginning to realise that this is a great time to buy and there are a lot of bargains to be had. House prices endured a record drop in April and this could indicate that builders are looking to do anything they can to reduce their inventories.

The Commerce Department reported that sales of new single family homes jumped by 16.2 percent in April to a seasonally adjusted annual rate of 981,000 units. It was the biggest one-month sales gain since a 16.4 percent surge in April 1993. Even with the increase, however, sales are 10.6 percent below the level of a year ago.

The average price of a new home stands at $229,100, a record 11.1% below the March level. That price was 10.9 percent below the level of a year ago, the biggest year-over-year price decline since 1970 and more signs that buyers should act now to get the best bargains.

David Seiders, chief economist for the National Association of Home Builders, said he was looking for sales of new homes to fall by 18 percent for the whole year, matching last year’s decline.

Builders are using increasingly aggressive tactics to sell their homes. They are also getting concerned about the tightening of lending rules by lenders following the sub prime fiasco. The fear is that this will further weaken demand in the next few months. Although the inventory of unsold new homes fell slightly to 532,000 in April, it would still take 6 months to work through the inventory at this rate.

This present slump in the housing market is the worst since the 1990 – 91 recession. Even though there are encouraging signs, it will take several more months for sales to pick up, especially as mortgage rates have started to rise. Buyers are beginning to take advantage of the present situation and realise that there are some great bargains out there

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