Fall in Home Sales
The rapid fall in home sales witnessed in April presented a threat to demand for the first time in many years. The authors elaborate that the fall in home sales is the second in a row but considered the most drastic ever witnessed after a long period. Consequently, the home prices considerably increase each day exerting pressure on buyers. Notably, the authors assert that home prices tend to increase twice more than the incomes and borrowing limits. Further, it is outlined that despite the economy growing, the housing sector has stuck and is not yielding substantial profits to home developers (Mutikani, 2018). The authors have strongly defended the thesis statement by outlining the reasons for fall in sales. First is the ever-escalating interests rate in the form of loans borrowed by home developers. Second, the growth of other sectors such as the oil industry has seen investment in more lucrative deals at the expense of housing. Third, the increasing rates of unemployment that has strained the economy and reduced the ability of households to purchase homes. For that, there are no limitations in respect to the authors’ arguments. As a matter of fact, the authors have supported their position using evidence, empirical data, and statistics of how the sales have fallen. Further, the authors have validly dissected house sales in regards to regions such as Northwest, South, and East of America. Therefore, the discussions and analysis are thorough. The article has highlighted important aspects of the housing sector. I have learned that the housing industry can only prosper if there is a considerable increase in household incomes, reduction in interest rates, and decline in the rate of unemployment. The article contributes to economics body of knowledge because it highlights the aspects of demand and supply. Thus, a fall in sales is occasioned by more demand than supply thereby increasing the price beyond the limits of other sections of the population.
Mutikani Lucia. (2018). U.S. home sales fall as record-low inventory boosts prices. Reuters.
Available at: www.reuters.com/article/us-usa-economy-housing/u-s-home-sales-fall-as-record-low-inventory-boosts-prices-idUSKBN1FD24Q. Retrieved May 28, 2018.