The US housing market is in turmoil. Risky loans, rampant buildings, increasing prices along with several other factors have changed the scenario in the housing market. The housing market is the county is facing a downfall. Evaluating reasons for this trend, a report by Harvard University‘s Joint Center for Housing Studies revealed an over supply of new homes, a significant rise in risky loans, and the false belief of several speculative home-buyers regarding price appreciation were primarily responsible for the downfall in the housing market
This trend of slow down in the housing market has been witnessed in several parts of the county. However, in Lafayette the picture seems to be different. Here the economy is booming, and housing prices and sales are high. However, experts are of the opinion that in near future Lafayette is surely to get affected by the wave of downfall in the housing market
There are several indications that the housing market in Lafayette is experiencing a decline in its demand. According to Realtor Association of Acadiana Multiple Listing Service, during the second quarter of 2007, the number of home sale declined by one percent as compared to the same time period last year, there by indicating a decline in its demand. The decline in its demand could also be due to rising housing prices in Lafayette. This is revealed from the fact that the median sale price for an existing home showed an increase of 8.5% in June 2007 as compared to June 2006, while the newly constructed home showed an increase of around 3%.
In this context experts are of the opinion that a rise in home prices will surely affect the ratio of homes coming on the market to homes sold each year, as several households will no longer be able to purchase a home. In this respect the National Association of Home Builders conducted a study in 357 metro areas including Lafayette, where rising home prices is a problem. The results showed that in context of Lafayette, a $7,600 increase in the median sale prices could result in 2,180 households not being able to afford homes.
