Us new Home Sales in 2010 Fall to Lowest in 47 Years

In yet another sign that the United States economy is still a shadow of what it used to be, some alarming news was just released.  The sale of new homes in the year 2010 fell to their lowest point in 47 years as reported by the Commerce Department yesterday.  Though the present administration is touting the fact that the economy is on the rebound after a nasty recession, numbers like this point to the fact that many facets of the economy are still hurting and dealing with hard times ahead.

If you pay attention to what leading economists think when it comes to a recovery in the housing market, they surmise that the country needs to get back to a level somewhere along the lines of 600,000 new homes being sold a year to feeling like there is a real recovery underway.  If their thoughts are correct, then the US is a long way off.  Last year’s figures read like this: Sales for all of 2010 totaled 321,000, a drop of 14.4 percent from the 375,000 homes sold in 2009, as cited by the Associated Press and the Commerce Department.

That figure would signal the fact that the market is nowhere near rebounding close to that number laid out by the economists and also signals a fifth straight year of declining new home sales.  If you go back those five years, you remember that the country was at the end of one of the largest housing booms in history and could be skewing the numbers a bit, but not enough to make them any less tolerable for home builders.

So why the continuing issues with the new housing market?  Well there are a number of factors that contribute to the problem.  As anyone that keeps abreast of the news knows, foreclosures have run rampant across the country for some time now.  Banks are still coming down on homeowners hard.  With that in mind, those looking for a new home go the route of buying up one of the properties that the bank has control of.  If your going to get a better deal, why buy something new?  With that in mind, new home builders are facing tough times because no one wants to build a house when there are so many others available.

Of course, there are also other factors driving these numbers into the basement.  Factors like fear of losing or keeping a job are keeping many people from extending their comfort level and taking on the burden of a mortgage.   Home prices also factor into those decisions as well.  Many people view their home as an investment in their future.  With home prices plummeting and forecasts saying they will continue to do so for at least half of 2011, why would people want to make that kind of investment now.