It has only been a few months since the housing market was showing signs of recovery from the worst recession in decades. Most of those gains came from government programs such as the home buyer tax credit and the Federal Reserve keeping mortgage rates down by buying mortgage backed securities. That government backing of the housing market will soon dry up.

Without the continued support of the federal government the housing market is at risk of collapse. There have already been consecutive months of decreases in home sales, both new and existing, home prices are being hampered by the rising number of foreclosures and interest rates will likely increase once the Federal Reserve stops buying mortgage backed securities.

If this trend of a falling number of home sales and a climbing number of foreclosures continues, it could very well threaten our broader economic recovery. If for no other reason, people who are losing equity in their homes are less likely to spend money than those who are gaining equity in their homes.

Some news from the Commerce Department released on the 23rd and 24th of March points to the housing market continuing to fall. The sale of new homes fell for the fourth straight month in February to a new record low. The sale of existing homes fell for the third straight month to lows not seen since July. The drop in sales for February has been blamed partly on unexpected bad weather for that part of the year.

Homebuilders are feeling the effect of this more than most. To cope with the drop in demand of new homes, home builders have continued to slow construction. Despite slowing construction homebuilders are still having difficulty competing against bargain homes from the flood of foreclosures that have been hitting the market.

Home prices are falling and that means builders are having a hard time recouping the costs. That equates to fewer construction jobs. All this points to bad news for the nation’s housing market.

New Homes Section is a one-stop destination to home builders, new homes for sale, and information about Arizona home builders. Quickly located new homes throughout the U.S. and discover information about pricing, floor plans, community locations and other features.

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