More Negative Housing News, More Theories

With the recent announcements about the dire state of the housing
industry, many are weighing in on what they think is wrong — and what
can fix the problem.

In yesterday’s blog, we discussed some possible solutions. First
Trust Advisors, an Illinois-based investment company, noted in a
release yesterday that housing sales have dropped to their lowest level
since 2000. The company has shared some interesting ideas on the
housing slump of its own via RTT News:

  • First Trust analysts stated that what matters for GDP growth is the rate of change, not the
    level of residential construction,  and that housing would become
    less of a drag on real GDP growth in the next quarter.
  • The company also stated that because new home sales are booked
    when the first contract is signed, even if
    the sale later falls through and the property is sold to someone else,
    it is possible that last year, when cancellations were high, the new
    home sales total was overestimated.

As industry experts continue to weigh in on the housing crisis, we
want to hear what you think, too. Do First Trust’s theories provide you
with hope? Are you rooting for a lending industry overhaul? Post your
suggestions in the comment section below.