The National Association of Realtors said today that sales of existing homes, which account for about 80 percent of all home sales, fell 8.4 percent in March. That was the steepest decline since 1989.With the sub prime mortgage disaster still unfolding and home prices at historically unaffordable prices, this was bound to happen. Just how long this slump will last and what effect it will have on the broader economy is still unknown. I believe the housing market is just the first in what will be many dominoes falling that will lead the U.S. into a recession by late this year or early next year. This is the nightmare scenario that Republicans have been dreading. Middle Class wages have been stagnant for years while home prices have climbed beyond their reach. This is the perfect storm created by years of foolish policies that benefit those at the upper levels of the economic scale.
At the same time, prices also dropped. The median price of an existing single-family home decreased 0.9 percent last month, to $215,300, compared with a year earlier.
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