October Home Sales Rise 23% in South
December 4, 2009
October home sales in the U.S. South vaulted 23 percent from last year as buyers scrambled to grab an expiring tax credit and wrestled for lower-priced homes, the National Association of Realtors said Monday.
Real estate agents from Texas to Maryland credited sales increases to low mortgage rates, affordable prices and the tax credit of up to $8,000 for first-time buyers. The incentive was set to die Nov. 30 before Congress extended it into next spring and added a $6,500 credit for current homeowners who move into another property.
Median sales prices in the South did fall to $151,100, a 6 percent decline from last October. Strong demand from first-time buyers in Florida and Washington D.C. led to some bidding wars over low-priced homes, including foreclosures, said Vicki Cox Golder, president of the Realtors group.
Nationally, October sales of existing homes were up by one-fifth compared with last year, without adjusting for seasonal factors. The median sales price dipped 7 percent to $173,100.
Re-sales of houses and condominiums increased in all 18 Southern metro markets covered by The Associated Press-Re/Max Housing Report, also released Monday.
Fourteen Southern markets saw prices fall on a year-over-year basis. Foreclosure-heavy Miami posted the steepest drop — a 30 percent decline to $150,000. Little Rock, Ark., Birmingham, Ala., and Houston recorded price increases from October 2008, while New Orleans held steady, the AP-Re/Max report showed.
The AP-Re/Max report analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.
While prices in Miami are down, sales rose 28 percent in October, compared with the same month last year. Miami’s real estate market not only benefited from the tax credit, but also from Canadian and European buyers taking advantage of a relatively weak dollar and affordable prices.
Real estate agent Ellen Windheim saw a difference in buyers’ attitudes compared with last year, when the country was mired in the recession and the financial market meltdown.
“There’s an optimism that the (economic) stimulus has done something for us,” said Windheim, an agent with Esslinger Wooten Maxwell in Aventura, Fla. “There’s obviously a tremendous amount of confidence out there.”
In Raleigh, N.C., first-time buyer Louise Brunson snapped up a three-bedroom, 2,200-square foot town house for $235,000 in the city’s northwest section. She and her husband originally planned to buy 1½ years ago but decided to wait until prices fell a bit further.
The Brunsons looked for about three months before deciding on the town house in a well-lit neighborhood in a good school district for their daughter.
“We suspected that (the tax credit) might be extended, but we did want to go ahead and get it done to be on the safe side,” said Brunson, a 39-year-old paralegal.
Buyers like the Brunsons drove a 16 percent increase in sales from last October in Raleigh-Durham, where the median sales price dipped 7 percent to $186,000, the AP-Re/Max report showed.
Real estate agent Harrison Tulloss said homes priced $180,000 and below are moving fast ahead of the holidays.
“People who are looking, they are serious,” said Tulloss, an agent with ZIP Realty in Raleigh-Durham. “They’re not riding around with me if they need to go shopping or buy a turkey.”
In Houston, home re-sales rose 12 percent from last October, when the state was reeling from Hurricane Ike. The pending elimination of the first-time buyer tax credit also drove people into the market, said Vicki Fullerton, who chairs the Houston Association of Realtors.
Dropping inventory due to accelerated sales was the story in Atlanta. The number of homes listed for sale fell 30 percent compared with October of last year, while sales rose nearly 7 percent, the AP-Re/Max report showed.
The first-time buyers’ tax credit “got them off the couch to look at homes,” said ZIP Realty agent Ed Neubaum in Atlanta.Neubaum noted some challenges in the Atlanta market, including a new flood of foreclosures expected to hit in January. Foreclosures are sold at a heavy discount, lowering values of nearby homes. Atlanta’s median sales price was $141,000, a drop of 6 percent, the AP-Re/Max report showed.
And, despite the inventory decline, sellers reluctant to lower their prices have seen their homes languish.
“They’re getting burned out keeping their house ready for sale,” he said.
Source: NEMS360.com
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Housing and Economy Headed for Sustainable Recovery
November 18, 2009
Aided by the home buyer tax credit, the outlook for housing and the economy appears headed for a sustainable recovery, according to the National Association of Realtors®.
Lawrence Yun, NAR chief economist, said the projections are enhanced by a tax credit expansion to more home buyers through the middle of 2010. “Given the success of the first-time buyer tax credit to date, and the need for qualified buyers to continue to absorb inventory that will include additional foreclosures over the coming year, we are hopeful about the impact of the expanded tax credit because it will stabilize home prices,” he said. “In fact, the credit is working better than first projected – it now looks like we’ll have 2.3 to 2.4 million first-time buyers this year.”
The 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows first-time buyers accounted for a record 47% share of home sales over the past year, up from 41% in the 2008 survey. The share has risen steadily since a cyclical low of 36% in 2006.
Existing-home sales are expected to total 5.01 million in 2009, a gain of 2.0% over last year, and then are forecast to rise 13.6% to 5.69 million in 2010. “A steady draw down of inventory will help home values to turn positive in 2010, but risks such as unemployment remain in the economy,” Yun said.
New-home sales are projected at 397,000 this year, recovering to 549,000 in 2010. Housing starts, including multifamily units, should total 564,000 units this year but grow to 752,000 in 2010.
The 30-year fixed-rate mortgage will probably average 5.3% in the fourth quarter, rising gradually to 5.8% by the end of next year. NAR’s housing affordability index will set a record in 2009, averaging 30 percentage points higher than 2008. Affordability will decline from record highs next year but will remain at historically attractive levels for home buyers.
“We’ve seen a steady downtrend in housing inventory for well over a year and home prices appear to be in the early stages of stabilizing. With the expansion of the tax credit to additional buyers through the middle of next year, and no major unforeseen events impacting the economy, home prices should rise between 3 and 5% in 2010, but with wide geographic differences,” Yun said. He expects growth in the U.S. gross domestic product to be at a pace of 2.5% in the current quarter, with GDP up 2.8% in 2010.
The unemployment rate is close to peaking and is projected to ease to 9.5% by the end of next year.
“The size of the U.S. budget deficit is a concern going forward, and carries the risk of higher inflation. At this point, that risk appears to be restrained,” Yun said. Inflation, as measured by the Consumer Price Index, is seen contracting 0.4% this year, then rising 1.6% in 2010. Inflation-adjusted disposable personal income is estimated to grow 0.4% this year and 1.2% next year.
For more information, visit www.realtor.org.
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Existing Home Sales Surge in Many States in Third Quarter
November 16, 2009
Most states continued to experience rising existing-home sales in the third quarter 2009, with prices moderating in many metro areas, according to the latest survey by the National Association of Realtors®. Total state existing-home sales, including single-family and condo, increased 11.4% to a seasonally adjusted annual rate of 5.30 million units in the third quarter from 4.76 million units in the second quarter, and are now 5.9% above the 5.01 million-unit pace in the third quarter of 2008. Sales increased from the second quarter in 45 states and the District of Columbia; 28 states and D.C. saw double-digit gains. Year-over-year sales were higher in 32 states and D.C.
Lawrence Yun, NAR chief economist, said the tax credit is a significant factor. “We can’t underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector,” he said. “It’s given buyers the confidence they needed to get off the fence and take advantage of extremely affordable housing conditions. The buying conditions this year are the most favorable on record dating back to 1970, but the tax credit is allowing buyers to set aside any reservations about waiting for a better deal.”
During the third quarter, 123 out of 153 metropolitan statistical areas reported lower median existing single-family home prices in comparison with the third quarter of 2008, while 30 areas had price gains.
The national median existing single-family price was $177,900, which is 11.2% below the third quarter of 2008; the median is where half sold for more and half sold for less. Distressed sales- foreclosures and short sales- accounted for 30% of transactions in the third quarter, which continued to weigh down median home prices because they sell at a discount relative to traditional homes.
“The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas, but we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market,” Yun said. “Foreclosures will continue to come on the market, but rising sales from the expanded tax credit should stabilize home prices by next spring and help to stem future foreclosures.”
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage rose to 5.16% in the third quarter from a record low 5.03% in the second quarter, but was dramatically lower than the 6.32% average rate in the third quarter of 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said he is encouraged by recent actions in Congress. “Extending and expanding the tax credit to more buyers through the middle of next year is the right medicine,” he said. “Congress understands the impact of housing on the economy, so consumers who aren’t able to complete a transaction before the end of this month now have a second chance but must have a contract in place by April 30, 2010.”
The biggest sales gain between the second and third quarters was in North Dakota, up 42.3%; followed by Rhode Island which rose 26.5%; and Pennsylvania, up 25.6%. The largest single-family home price increase in the third quarter was in the Cumberland area of Maryland and West Virginia at $122,100, up 19.2% from the third quarter of 2008. Next was the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price increased 14.3% to $115,600, followed by Oklahoma City, at $144,100, up 9.1% from a year ago.
“The wide range of market performance and reversals around the country, ranging from double-digit gains to double-digit losses in both sales and prices, underscores just how local real estate truly is,” Yun said. “The wide changes and mix of numbers also indicates a market in transition, hopefully to one that is becoming more balanced and stable.”
Median third-quarter metro area single-family home prices ranged from a very affordable $61,400 in the Saginaw-Saginaw Township North area of Michigan to $566,000 in the San Jose-Sunnyvale-Santa Clara area of California. The second most expensive area in the third quarter was San Francisco-Oakland-Fremont at $538,100; followed by the Anaheim-Santa Ana-Irvine area of California at $498,800.
Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $70,700, and Lansing-East Lansing, Mich., at $86,600.
In the condo sector, metro area condominium and cooperative prices- covering changes in 55 metro areas- showed the national median existing-condo price was $178,000 in the third quarter, down 15.4% from the third quarter of 2008. Four metros showed annual increases in the median condo price and 51 areas had declines.
The metros experiencing condo price gains were San Diego-Carlsbad-San Marcos, at $215,100, up 13.3%; followed by the Cincinnati-Middletown area, up 2.0% to $119,700; the Toledo, Ohio, area, where the median price of $130,400 rose 1.7% from the third quarter of 2008; and the Indianapolis area at $114,400, up 0.8%.
Metro area median existing-condo prices in the third quarter ranged from $67,600 in Las Vegas-Paradise, Nev., to $432,800 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was New York-Wayne-White Plains at $297,500, followed by Boston-Cambridge-Quincy at $293,700. Other affordable condo markets include Reno-Sparks, Nev., at $81,300 in the third quarter, and Jacksonville, Fla., at $91,600.
Northeast
Regionally, existing-home sales in the Northeast surged 16.7% in the third quarter to a pace of 930,000 units and are 6.9% higher than a year ago. The median existing single-family home price in the Northeast declined 9.4% to $244,500 in the third quarter from the same quarter in 2008. The best price gain in the region was in Buffalo-Niagara Falls, N.Y., where the median price of $119,700 rose 4.8% from the third quarter of 2008; followed by Manchester-Nashua, N.H., at $237,600, up 2.6%; and the Pittsburgh area, where the median price rose 1.5 percent to $124,600.
Midwest
In the Midwest, existing-home sales jumped 13.2% in the third quarter to a pace of 1.20 million and are 5.2% above a year ago. The median existing single-family home price in the Midwest was down 5.5% to $150,200 in the third quarter from the same period in 2008. After Davenport-Moline-Rock Island, the next strongest metro price increase in the region was in Cedar Rapids, Iowa, where the median price of $145,700 was 7.6% higher than a year ago; followed by Bismarck, N.D., at $157,200, up 7.5%; and Ft. Wayne, Ind., where the median price rose 6.9 percent to $102,500.
South
In the South, existing-home sales rose 11.3% in the third quarter to an annual rate of 1.97 million and are 5.9% higher than the third quarter of 2008. The median existing single-family home price in the South was $160,000 in the third quarter, down 7.9% from a year earlier. After Cumberland and Oklahoma City, the next strongest price increase in the region was in Shreveport-Bossier City, La., at $152,300, up 8.6% from the third quarter of 2008; Jackson, Miss., at $141,200, up 4.6%; and Durham, N.C., where the median price rose 3.6% to $184,300.
West
Existing-home sales in the West increased 5.6% in the third quarter to an annual rate of 1.19 million and are 4.6% above a year ago. The median existing single-family home price in the West was $224,000 in the third quarter, which is 16.4% below the third quarter of 2008. The best metro price performance in the West was in Yakima, Wash., where the median price of $158,400 rose 2.7% from a year earlier; the Denver-Aurora area at $229,100, up 1.8%; and the Kennewick-Richland-Pasco area of Washington, where the median price rose 0.7% to $172,200.
For more information, visit www.realtor.org.
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Home Prices Fall But Sales Continue to Climb
November 11, 2009
A real estate group says home prices fell in eight out of every 10 U.S. cities in the third quarter of this year as heavily discounted distressed sales made up 30 percent of all deals.
But home sales continued their climb, with quarterly sales outpacing the second quarter and the previous year’s figures, the National Association of Realtors said Tuesday.
The median sales prices of existing homes declined in 123 out of 153 metropolitan areas compared with the same period a year ago. Prices rose in the other 30 cities.
The national median price was $177,900, or 11 percent below that of the third quarter last year.
“The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas,” said Lawrence Yun, the group’s chief economist. “But we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market.”
Separately, the Treasury Department said Tuesday that as of the end of October, more than 650,000 borrowers, or 20 percent of those eligible, had signed up for the Obama administration’s mortgage-relief program to reduce monthly payments to more affordable levels.
Launched with great fanfare in March, the plan got off to a weak start, but now nearly 920,000 loan-modification offers have been sent to more than 3.2 million eligible homeowners. That works out to 29 percent, up from 15 percent at the end of July.
The homes report said prices in Fort Myers, Fla., plunged 40 percent to $98,000 from a year ago, the worst in the nation. Las Vegas saw its median price tumble almost 35 percent to $138,500 year over year.
The largest price gain, by contrast, was in Cumberland, Md., where prices jumped 19 percent to $122,100. Davenport, Iowa, followed with an increase of 14 percent to $115,600.
The federal tax credit of up to $8,000 for first-time homebuyers helped boost sales in the third quarter. U.S. home sales rose in 45 states from the second quarter, with 28 states posting double-digit gains.
Total quarterly sales reached a seasonally adjusted annual rate of 5.3 million, up more than 11 percent from 4.76 million in the second quarter.
President Obama signed a bill last week extending and expanding the federal tax credit. Now, buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500. First-time homebuyers – or anyone who hasn’t owned a home in the past three years – would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
Meanwhile, though the Obama administration’s mortgage-relief program has reached one in five eligible homeowners, most of those borrowers are on temporary trial plans.
To make the change permanent, borrowers must complete a big stack of paperwork and show they can make their payments on time. At the beginning of September, only about 1,700 permanent modifications had been made. The Treasury Department expects to release updated data later this month.
“We’re seeing some early indications that the servicers haven’t done enough to get all the documents in,” said Michael Barr, an assistant Treasury secretary.
In California, about 130,000 homeowners have been enrolled in the “Making Home Affordable” loan-modification plan. That works out to about 19 percent of the state’s homeowners who were either two payments behind or in foreclosure at the end of last month, according to Treasury Department data.
Two other hard-hit states, Arizona and Nevada, had similar rates of assistance as California, at 22 percent and 18 percent respectively. Florida, however, was much lower, at 12 percent, possibly because of high numbers of investor-owned properties that don’t qualify for the program.
Government officials say they are pressing mortgage companies hard to improve their performance. Still, many housing advocates have been disappointed with the $50 billion plan’s progress and say that getting a loan modification remains a battle.
Source: The Washington Times
Popularity: 2% [?]
Homebuyer’s Tax Credit Applies to Higher Income, Move-up Buyers
November 3, 2009
The Senate is expected this week to pass an extension of the credit that was originally going to expire Nov. 30. Buyers who sign a purchase agreement by April can now claim the credit.
The extension will apply to higher income buyers. Previously the credit was available to individual filers making $75,000 a year or less. For couples the limit was $150,000. The new income limit will be $125,000 for individuals and $225,000 for couples.
There’s also something in for move-up buyers. Previously you couldn’t claim the credit if you owned a home in the past three years. Now, if your last home was your primary residence for at lease five years, you can claim $6,500 in credit if you buy a new home. The new house can’t cost more than $800,000 though.
Just in time to kick Washington into action, the National Association of Realtors reported that pending home sales jumped 6% today. That’s the eighth month in a row of sales increases and the longest rising streak since 2001. “What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” said the association’s chief economist Lawrence Yun.
Jim McQuaig, a mortgage broker in Reston, Virginia, said he recently completed financing for a woman buying a $430,000 home who said the $8,000 tax credit was the incentive.
Imagine that, one of the largest purchases of your life and you’re moved to do it by a tax credit worth less than 2% for the purchase price!
Source: BusinessWeek
Popularity: 2% [?]
Pending Home Sales Rise for Record 8 Straight Months
November 3, 2009
Pending home sales rose again, marking eight consecutive monthly gains–the longest streak since measurement began in 2001, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in September 2009, rose 6.1% to 110.1 from a reading of 103.8 in August, and is 21.2% higher than September 2008 when it stood at 90.9. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8.
Lawrence Yun, NAR chief economist, said the momentum is understandable. “What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” he said. “Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery.”
NAR estimates approximately 3 million renters are now financially well-qualified to buy a median-priced home. “As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers,” Yun said. “Although the tax credit is greatly reviving the existing home market, new-home sales may continue to struggle as home builders hold back production to drive down inventory. In addition, there remains an ongoing credit crunch for construction loans.”
The Pending Home Sales Index in the Northeast slipped 2.0% to 83.6 in September but remains 16.9% above September 2008. In the Midwest the index rose 8.1% to 98.2 in September and is 17.8% higher than a year ago. In the South, pending home sales increased 4.9% to an index of 109.7 and is 22.8% above September 2008. In the West the index jumped 10.2% to 143.8 and is 23.7% above a year ago.
Yun added that strong near-term reports should not be overstated. “We’re clearly not out of the woods because an excess of homes remains on the market despite recent improvements,” he said. “Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory.”
For more information, visit www.realtor.org.
Popularity: 2% [?]
Big Rebound in Existing Home Sales Shows First Time Buyer Momentum
October 26, 2009
Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of Realtors®. Existing-home sales–including single-family, townhomes, condominiums and co-ops–jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2% higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.
Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”
Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said. “We’re getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history.”
Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45% of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29% of transactions in September.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average,” McMillan said.
Total housing inventory at the end of September fell 7.5% to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0% below a year ago.
“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06% in September from 5.19% in August; the rate was 6.04% in September 2008. The national median existing-home price for all housing types was $174,900 in September, which is 8.5% lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.
Single-family home sales rose 9.4% to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7% above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1% below a year ago. Existing condominium and co-op sales jumped 9.7% to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7% above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7% from September 2008.
Northeast
Regionally, existing-home sales in the Northeast increased 4.4% to an annual level of 950,000 in September, and are 11.8% higher than September 2008. The median price in the Northeast was $234,700, down 7.0% from a year ago.
Midwest
Existing-home sales in the Midwest jumped 9.6% in September to a pace of 1.25 million and are 7.8% above a year ago. The median price in the Midwest was $147,600, which is 1.0% below September 2008.
South
In the South, existing-home sales rose 9.0% to an annual level of 2.06 million in September and are 10.8% higher than September 2008. The median price in the South was $153,500, down 7.6% from a year ago.
West
Existing-home sales in the West surged 13.0% to an annual rate of 1.30 million in September and are 5.7% above a year ago. The median price in the West was $219,000, which is 15.0% below September 2008.
For more information, visit www.realtor.org.
Source: RISMedia
Popularity: 1% [?]
Existing Home Sales Rebound to 2 Year High
October 23, 2009
Sales of previously owned U.S. homes surged to their highest level in more than two years in September, a survey showed on Friday, providing further evidence the housing market and economy were on the mend.
The National Association of Realtors said sales surged 9.4 percent to an annual rate of 5.57 million units, the highest level since July 2007, from a downwardly revised 5.09 million units in August.
Analysts polled by Reuters had expected September sales to rise to a 5.35 million unit pace from the previously reported 5.10 million units in August.
William Larkin, portfolio manager with Cabot Money Management in Boston, said home sales were bolstered by a government program to give first-time buyers a tax credit.
“The existing home sales data is a good sign for the housing market. I would assume a lot of first-time buyers have scrambled to get this $8,000 credit. That will be the part that is hard to define within the numbers,” he said.
“It definitely looks like the stimulus that is going into housing is starting to form a bottom.”
U.S. stock indexes briefly recouped losses on the data, while government bond prices were little moved.
The housing sector’s collapse and the subsequent global credit crisishelped to push the U.S. economy into recession at the end of December, its worst slump in 70 years.
But the housing market is gradually crawling out of a three-year recession, and analysts believe that in the third quarter residential investment probably contributed to economic growth for the first time since the fourth quarter of 2005.
Signs of recovery in the housing market, coupled with other fairly upbeat data, strongly suggest the economy started growing again in the third quarter after four straight quarters of declining output.
Compared to September last year, existing home sales were up 9.2 percent.
Sales for both new and previously owned homes have boosted by a combination of a the popular $8,000 government tax credit for first-time buyers, low prices and mortgage rates.
But there are fears that the expiration of the tax credit at the end of November could hamper the recovery.
The Obama administration is still considering extending the program but is weighing that against efforts to bring down the federal deficit, senior White House officials said on Wednesday.
“We are hopeful the tax credit will be extended and possibly expanded to more buyers … because the rising sales momentum needs to continue for a few additional quarters until we reach a point of self-sustaining recovery,” said NAR chief economist Lawrence Yun
The national median home price fell 8.5 percent to $174,900 in September from a year-ago. That was the smallest percentage decline in 13 months, the NAR said. Distressed properties made up 29 percent of sales last month, with first-time buyers accounting for 31 percent.
The inventory of existing homes for sale in September dropped 7.5 percent to 3.63 million units. September’s sales pace left the supply of previously owned homes on the market at 7.8 months’ worth, the lowest in two-and-a-half months, from 9.3 months’ worth in August.
Source: Reuters
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