More Homes, Fewer Buyers Weaken Housing Market

The housing market continues to bounce along a rocky bottom.

The Mortgage Bankers Association reported today that mortgage applications for new, single-family home purchases for the week of Feb 18 continue a downward trend, falling sharply by 7.3 percent to its lowest level since 1997. The refinance index fell by 8.9 percent.

New home sales for January showed an even steeper drop, losing 11.2 percent from the December sales figure and 6.1 percent from January 2009. Inventory of homes for sale reversed an 8-month trend in January, increasing inventory levels to 9.1-months supply. And median prices fell another 5.6 percent to $203,500.

An increase in the number of new homes entering the market and falling consumer confidence levels contributed to the weak numbers. Realtors expect demand to pick up as the deadline for homebuyer tax credits looms closer this April, much like the increase in buying activity last November before the tax credit program for new homebuyers was extended.

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