Home sales fell in the month of May by 3.8 percent. As sales and home prices continue to decline, homeowners are finding that they can't afford to sell their homes. The American dream of owning a home of your own is much harder to achieve. First time homeowners are finding that it's hard to get a loan, and that they need more money down to qualify for a loan.
Unbelievably the government decided to bail out big business, tried to stimulate the economy, and bailed out the car industry. In spite of government intervention, the housing market continues its downward spiral, unemployment remains high, and many fear that we will go into a double dip recession.
Michelle Meyer, an economist at Bank of America Merrill Lynch in New York, draws a correlation between the country's economic woes and the depressed housing market, saying:
[The continued housing down turn is] indicative of the depressed housing demand that we have been seeing for some time and that's a function of the slow economic recovery and tight credit markets.
Even though the news of home sales being at a six month low came out, it didn't have an impact on the stock market which was on the up side. Apparently Wall Street wasn't alarmed by the housing news. This isn't much consolation to a homeowner who has had their home on the market for a couple of years without a decent offer. Is it possible to have a real economic recovery without seeing the housing market stabilize?
The glut of homes on the market is the main cause for depressed home prices. Some homeowners are trying to weather the storm by waiting out the down turn. Others are not so lucky. You probably have homes in your neighborhood that are sitting empty. More than likely you know of a family member or friend who is in danger of having a home, or already has had a home foreclosed on.
This is normally the time when home sales should be at their strongest. Instead for the past couple of months the housing market has declined. Can this be a predictor of what is in store for the overall economy? There doesn't seem to be an end in sight yet.
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