Previously owned home sales fell in September. The National Association of Realtors says home (NYSE:IYR) sales were down 3 percent last month to 4.91 million homes (lowest since 1997) — which is below the 6 million that economists say is a healthy housing market. The housing market has been hurt by foreclosures, low demand, and diminishing home prices.
Homes in danger of being foreclosed on foreclosure only made up 30 percent of sales, down a percent since August. 19 percent of those sales were by investors who are purchasing homes below $100,000. First-time buyers made up 32 percent of sales, which is the same as August.
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Low sales are also due to people who are hesitant to buy a house two years after the recession officially ended. Others are not eligible for loans or don’t can’t make the higher down payments. Even ones with good credit and steady jobs aren’t buying due to anxiety that home prices will keep dropping.
Many economists think home costs will keep dropping and several forecasts don’t expect a turn around until at least 2013. Economists don’t thing the Obama administration’s program allows homeowners to refinance their mortgages will help either.
The high rate of foreclosures has made re-sold homes much cheaper than new homes. The median sales price dropped roughly to $165,400 in September from August. A new home is now roughly 30 percent higher than the price for a previously occupied home — almost twice the normal markup.
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