Following the weak existing home sales in July, the U.S. Department of Commerce has announced a record 25 new home sales data record low, a series of bad news that the U.S. housing market bottoming out dashed. Analysts believe that the measures in the irritating experience led the Government “false prosperity”, the U.S. real estate market is still the root cause is not eliminated, the short-term recovery unspeakable.

As the source of the current round of financial crisis, a spike in U.S. real estate market, but also make the market more negative on the U.S. economic outlook has re-issued economic experts on this “second bottom,” the warning, and expected time of the Federal Reserve may take measures necessary further easing monetary policy.

Frequency of attacks bad housing market

The Commerce Department report released on August 25 said the United States in July new home sales fell 12% chain to 27.6 million, far beyond expectations, and set the record in 1963, the lowest monthly level. Month the American West, Northeast, Midwest and South region four new homes were sold the chain fell, which the West sales plunged 25.4%, total record low. In addition the report also showed U.S. new home sales last year, a cumulative decline of 32.4%, average selling price dropped 13.2% to 235,300 U.S. dollars.

The day before National Association of Realtors has just announced that existing home sales market is extremely disappointing data. Data showed U.S. existing home sales in July plunged 27.2% to the chain 3.83 million, the highest since 1968, the largest decline.

Mortgage Banking Association’s latest data showed last week, U.S. mortgage applications increased 4.9%, while the demand for purchase loans almost still “marking time.” Since the end of April after the end of preferential tax policies for home buyers, home buyers loan application volume fell a cumulative total of 41%.

However, Professor at Yale University, S & P – Kaisixile price index – co-founder Robert Shiller seems that in July U.S. housing sales data is “unusual”, because it is due the government stimulus , can not be with the other months of data to compare, Schiller said: “The response to this data, not radical.”

Some analysts also believe that, in July the U.S. housing sales plummet due by short-term impact of tax policy. According to the U.S. government issued a policy, in the April 30 signing of the housing purchase contract prior to the June 30 and complete the transaction buyers can enjoy Up to 8000 dollars in tax breaks, which to some extent on the stimulus potential buyers make a purchase decision in advance. But in the end of June to extend the validity period of three months of the policy when the home buyers completed by the end of September as long as you can continue to enjoy preferential purchase.

Abduction of the housing market with high unemployment

Since the housing bubble burst in 2007, the U.S. housing market has been in recession for three consecutive years. 3,4-home sales this year, once a month pick up signs, be regarded as “Indian summer”, but the purchase tax benefit from the measures the Government after the expiration of the level of activity the real estate market plummeted, some industry insiders believe that the Government’s tax cuts to stimulate the measures have not fundamentally changed the U.S. housing market supply and demand fundamentals, but only a portion of volume to the policy period in advance to be digested.

In addition to policy factors, continued weakness in the job market, personal income growth due to weak purchasing power and willingness of the residents fell into a long-struggling housing market is also an important reason. The U.S. unemployment rate remained high at 9.5% and may rise further because of fears of potential buyers due to unemployment in the mortgage default risk and not rush shots, the market waiting to see a strong atmosphere.

“National demand is still sluggish.”‘s Largest home builders Paldi CEO Dugas said: “The lending rates at historic lows, while house prices are more reasonable, but consumer confidence is still low.” He pointed out that only in the economic recovery, employment increases, people will consider buy a house.

Drag on economic recovery

In the history of the U.S. economy in recession, 8, 7 views are from the real estate market decline, which makes the recent series of bad housing data re-tighten the market nervous. Some of the industry worry that the weak real estate market is likely to stifle the recovery of the U.S. economy into recession or even to Zaici trap, while the economic outlook and the employment situation will deteriorate further crack down on housing demand in turn.

Moody’s Economy.com, housing director of Cilia economy that, if the rate of housing foreclosures continue to rise, will no doubt depress prices to a certain extent, and a serious threat to the economy, “because the housing market and wider economy is on the very existence of close contact of. ” Prior to that, including former Federal Reserve Chairman Alan Greenspan, the U.S. Treasury Secretary Timothy Geithner and other celebrities, including a number of political and economic issue over the housing market also may be a drag on U.S. economic recovery warning.

O’Neill, chief economist at Goldman Sachs said the U.S. “disappointing” economic reports came in, could prompt the Federal Reserve launched a new round of quantitative easing policy. He pointed out that if U.S. economic data remains in the doldrums, the Federal Reserve shot to interfere, the situation is not expected to improve in October, then policy makers will take action.

Federal Reserve this week will be held five annual meetings, the outside world when Fed Chairman Ben Bernanke is expected to monetary policy and economic outlook will be further elaborated. Market, policy makers want to reboot to whether quantitative easing, is buying more U.S. Treasury bonds, and whether further reduction in U.S. economic outlook and other issues Q FAQ. However, some in the industry believe that radical measures are not necessarily much of an impact on the economy, Naroff Economic Advisors Chairman Joe Naroff said the Fed’s arsenal of weapons may be enough, but “most of them may only water gun. “

Author Bio: The e-commerce company in China offers quality products such as Medical Disposables products, gifts& health care products, and more. For more , please visit disposable medical exporter today!and many more.

Category: World Affairs
Keywords: Medical Disposables products,gifts& health care products,disposable medical exporter,