Across the nation, new home sales rose by 0.7 percent last month according to the United States Commerce Department with the largest gains in the western portion of the country. Federal tax incentives for first time homebuyers and reduced home sales prices have played an important part in this increase by allowing young families the opportunity to buy their first home. August was the 5th consecutive month that reflected increased new home sales but the increase fell greatly short of predictions showing that for many the recession is still contributing to financial insecurity.
Due to the unstable economy many lenders, however, have been tightening home loan requirements for young buyers trying to take advantage of tax incentives. Home prices are beginning to show signs of increase and may move home ownership back out of the reach of potential first time buyers. The Federal Reserve reports that 32 percent of mortgage applications were rejected in the last year as Americans battle higher prices, fewer jobs and higher debt. Although the economy is showing small signs of recovery, personal financial hardship and excessive credit card debt is still a reality.
While it appears that the federal government’s attempts to rekindle a dwindling real estate market may have worked to a limited extent, it appears that attempts to keep recession caused financial woes from forcing many homeowners out of their homes has failed. Over 300,000 homes were in foreclosure in August of 2009, a number that far exceeds foreclosure filings for the same period in 2008 by 18 percent. This trend shows no signs of abatement and is expected to rise with the increasing unemployment rate.
Tags: Personal Debt
