According to the Indianapols Star article Hope rises for Central Indiana home sales in 2009,
home sales in Central Indiana dropped 29 percent during November compared with the same month last year. For the year, home sales are down 16%.The article predicts that home sales will rise in 2009 due to the lowest mortgage rates in 50 years. However, if the current trends in job loss and economic decline are not stemmed, the cuts in mortgage rates will have minimal effect on home sales. Further, as the article points out, the rate cuts have the effect of
cutting the cost of buying a home mortgage and giving homeowners with good credit an opportunity to refinance their mortgages.The key phrase there is "homeowners with good credit." In order to encourage a widespread renewal in the home market, its important to keep up the push for government intervention to create and protect jobs at living wages. Its also important to recognize the impact of falling home prices.
The average sales price in the 13-county study fell from $143,182 to $128,867, a 10 percent drop, from November 2007 to November 2008.When a home owner with a mortgage can't sell their house for as much as the mortgage buy-out they are effectively locked into their home. This issue needs to be addressed. At the end of the day, the current economic crisis has not responded to fiscal stimulous efforts. This is a structural crisis that can only be resolved by putting working families back to work at a living wage, providing universal quality affordable health care, and protecting people's retirement funds and expanding Social Security benefits, including raising Social Security retirement payments.