The floor has fallen out from underneath the housing market in the
months since the homebuyer tax credit expired in April. In July, total home sales
fell by 26% m/m, to a level not seen in 17 years. Of course,
this was largely due to purchases being brought forward from the summer
months into the spring. And the 5.2% m/m rebound in the pending home sales
index in July suggests that the post-tax credit floor in sales may have been
reached. But demand towards the start of the home-buying pipeline has
remained weak. Even the fall in mortgage rates to new record lows has done little
to boost mortgage applications for home purchase.
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