Existing Home Sales Dragged by Jobs Market
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (TheStreet) -- The market for existing homes remains in the doldrums, as young couples continue to opt for renting and older couples can't unload homes to retire or relocate to find employment.
The National Realtors Association reported today that sales in January were 4.57 million, below the 4.69 million expected by forecasters. This confirmed concerns that large numbers of buyers were getting cold feet and canceling contracts. Reports of stronger buyer activity and pending sales must be taken with a sack full of salt.
Prices are falling -- the average sales price was $154,700, down from $162,200 in December, raising new concerns that the job market might not be recovering as much as thought. A strong job market is necessary to give young couples confidence that they can take the plunge into homeownership, and not get caught in a fire sale situation by losing a job or a forced relocation.December sales were revised down to 4.380 million from 4.61 million -- that is huge. Helping homeowners with underwater mortgages and shoring up the housing market will be big campaign issues this fall, but with the continued downward trajectory in prices, federal programs can do little to significantly help. This issue may prove more demagogued than any other by false charges and whimsical promises. Follow TheStreet on Twitter and become a fan on Facebook. Without a more robust jobs market, existing home values simply won't level off and begin the long path to recovery.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV