The U.S. Commerce Department recently reported that sales of new homes have fallen 2.2 percent from the previous month to 308,000 and 13 percent below the February 2009 figure of 354,000, making last month’s figure the lowest on record dating back to 1963. This also marked the fourth consecutive month that new home sales declined. Meanwhile, the number of new homes up for sale the same month rose slightly to 236,000, a 1.3% increase over January’s inventory figures.
Economists at the National Association of Home Builders attribute this slide in new home sales to consumers’ ongoing concerns about the job market and the economy and the brutal snowstorms that blanketed most of the country. With the Federal Reserve’s $1.2 trillion program to purchase mortgage-backed securities scheduled to end this month, there are concerns about how much interest rates will rise and how that will impact the housing market.
Besides extending the $8,000 first-time homebuyers’ tax credit, the government is making a tax credit of up to $6,500 available to existing homeowners who are looking for a “step up” by selling their current home and buying another one during the same period. In addition, New York State is offering cash advances of up to $8,000 on the federal homebuyer tax credit for borrowers using a State of New York Mortgage Agency (SONYMA) mortgage to purchase a home.
The SONYMA program and the spring weather are expected to boost home sales further in New York State. But with economic woes continuing to plague the Empire State, the housing market remains sluggish.
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