The Housing Market

The Standard & Poor's showed that homes prices are tumbling more than the annual rate ever in July, even though it is happening slowly, there is no sign of a way out. According to the S&P index the city housing index fell a record 16.3 percent in July from the year-ago month, the largest drop since its inception in 2000. The 10-city index plunged 17.5 percent, its biggest decline in its 21-year history. However, the pace of monthly declines is slowing, a possible silver lining. Between May and July, for example, home prices fell at a cumulative rate of 2.2 percent — less than half the cumulative rate experienced between February and April. But there's "no evidence of a bottom," said David M. Blitzer, chairman of the index committee at S&P.

This does not make me feel very comfortable, because three years ago I recently purchased my first home. Of course they said it was the right time to buy before rates go up. So, we took the plung and now this economic crisis hits. What will happen to our money if the banks go bankrupt? We will not be able to pay our mortgages if we lose our jobs? The leap we took in purchasing this home was for security for our families future. Now this future looks very dim.

Tthe National Association of Realtors said the median sales price of an existing home fell 9.5 percent to $203,100 last month, the largest annual price decline on records dating to 1999. The median home price of a new home fell 5.5 percent to $221,900 in August, the Commerce Department also said last week. The Case-Shiller numbers have yet to reflect the effects of the recent turmoil in the financial industry. This economic recession seems so real right now.

According to the Associated Press "How many people are going to sit down and say: 'You know honey, it's a good time to buy a house?'" asked Thomas Lawler, a housing economist in Northern Virginia, as stock markets tanked Monday. "The government really needs to get its act together."