According to an article in the Dallas Morning News, new home sales in the Dallas-Fort Worth area have fallen 40 percent in the first quarter of 2009. Only 4,200 new home sales were recorded in the first quarter, the lowest number of new homes sold in North Texas in more than a decade.
Many potential buyers are simply not looking at new homes, especially with the glut of foreclosures on the market. Of course there are those potential buyers who are holding back on buying a new home because of job loss fears and lack of credit; but the number of foreclosures on the market is definitely a major factor causing low sales in the new home market. The current foreclosure crisis is negatively impacting the housing market and will continue to do so until we reduce the number of foreclosures.
We cannot wait for the foreclosure crisis to “correct itself” it’s simply not going to happen, because we’ve passed the tipping point. The foreclosure crisis is out of control. That’s why we advocate allowing homeowners facing foreclosure to modify their mortgage in bankruptcy. If homeowners facing foreclosure are allowed to modify their mortgage in bankruptcy we would almost immediately reduce the number of foreclosures and likewise relieve the pressure on the housing sector.