Monday delivered yet another example of the headwinds facing the US economy when the National Association of Realtors released data showing that sales of existing homes in the US plunged by 7.1% in February.

“High prices and low-paying, part-time jobs in the services sector kept first-time buyers sat on the fences and that dynamic isn’t likely to change any time soon,” said Harry Coolidge, senior economist at Tokyo-based investment manager, Mizuho Financial Global.

The depth of the fall in sales was far worse than consensus forecasts for a 2.8% decline and revived concerns over the outlook for the US economy. Sales have been particularly volatile and vulnerable to large swings after the introduction in October for new mortgage rules aimed at helping homebuyers better understand their loan options.

Mizuho Financial Global said markets would have to decide what data to put faith in. “Despite a lot of negative data about the US economy including this resales number, many investors choose to place faith in the strong US jobs numbers we’ve been getting,” said Coolidge. “The fact is though that, if people were working and earning good wages, home sales would be increasing, not plunging. Wage growth is anemic and many Americans are holding down 2 or more part-time jobs in order to make ends meet.

The US housing market has taken several years to recover from the housing crisis that caused the great financial crisis of 2008 but it has yet to reach the heady highs it enjoyed in 2005/06.

About Mizuho Financial Global:
Mizuho Financial Global is an independent, full-service brokerage, wealth management and business management concern dedicated to providing pioneering capital appreciation and wealth preservation solutions to affluent individuals and families and businesses.

Without exception, they place the welfare of their clients first and foremost and they take great pride in knowing that they are the first port of call for their investment and financial affairs. They constantly exceed our clients’ expectations by going the extra mile to deliver the service and, most importantly, the returns on investment their patronage demands.