Today's sluggish housing market has little margin for error: Make an ill-conceived or poorly researched home purchase now, and you'll almost certainly pay the price later. To avoid that, make sure you have the right answers to these three questions before you buy your next home.
The latest reports on home sales and prices offer a complicated and conflicted picture. But when the data are taken together, one thing is clear: Weighing risk and reward, it's worth waiting a few months to see which way the real estate winds are really blowing.
The U.S. housing sector got another dose of sobering news Tuesday, as home prices in all 20 major cities tracked fell a worse-than-expected 1.3% in October from September. The S&P Case-Shiller index has now dropped for four straight months.
One of these months, new-home sales are going to show that Americans have decisively returned to buying newly built residences. Unfortunately, November was not that month: New-home sales rose a less-than-expected 5.5% to a 290,000-unit annual rate.
Housing remains in a slow, but uncertain recovery, as existing-home sales increased a less-than-expected 5.6% last month, to a 4.68-million-unit annual rate. At least, home sales rose in every U.S. region, and inventories fell.
The humbled housing sector took a modest step forward last month as starts rose a better-than-predicted 3.9% to a 530,000-unit annual rate. Still, at the current pace, the nation is 18 to 24 months from seeing normal levels of homebuilding.
U.S. housing starts unexpectedly plunged 11.7% in October to a 519,000-unit annual rate, weighed down by a 47.5% decline in apartment and condo construction. But building permits, a leading indicator of future housing construction, did inch 0.5% higher last month.
The unexpected increase of 0.3% to a 610,000 annual rate provides additional evidence that homebuilding may be bottoming. However, economists caution that it's still too early to declare any kind of solid turnaround.
After the federal home buyers tax credit ended at the end of April, analysts expected that sales would drop 7% in June. The reality was not quite that bad, with a 5.1% decline. Should Congress renew the credit?
