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American home resale sales jump 9.4%
Home resales in September clocked the largest monthly increase in 26 years as buyers scrambled to complete their purchases before a tax credit for first-time owners expires. Sales jumped 9.4 per cent to a seasonally adjusted annual rate of 5.57 million last month, from a downwardly revised pace of 5.1 million in August, the National Association of Realtors said Friday.
That pace was the strongest in two years and beat Wall Street forecasts. Sales had been expected to rise to an annual rate of 5.35 million, according to economists surveyed by Thomson Reuters.
"There's a miniboom going on in the housing market," said Thomas Popik, who conducts a monthly survey of real estate agents for Campbell Communications.
Nationwide sales are up nearly 24 per cent from their bottom in January, but are still down 23 per cent from four years ago.
But prices continued to drag with foreclosures and short sales, where the mortgage exceeds the sales price. The median price last month was $174,900 (U.S.), down almost 9 per cent from $191,200 a year earlier, and slightly lower than August's median of $177,300.
The inventory of unsold homes on the market fell about 7 per cent to 3.63 million. That's less than an eight-month supply at the current sales pace, and the lowest level since March 2007.
Sales rose especially in the west, where they grew 13 per cent from a month earlier. Foreclosure sales are booming in cities like Los Angeles, San Diego and Las Vegas.
First-time homebuyers and investors are snapping up those homes and taking advantage of low mortgage rates. They can also receive a tax credit of 10 per cent of the sales price, up to $8,000, if the sale is completed by the end of November.
The credit is so important to some buyers they are adding a clause to their contracts, allowing them to back out if the sale doesn't close by Nov. 30. But, economists note that cheap foreclosures and mortgage rates are also adding to the boom.
"We think the housing market has touched bottom and it is now only a matter of time until home prices stabilize – something that we anticipate to occur in late 2010," wrote Joseph LaVorgna, chief U.S. economist at Deutsche Bank.
Prices could fall further because rising unemployment leads to more foreclosures. The jobless rate, currently at 9.8 per cent, is expected to rise as high as 10.5 per cent next year, causing more people to fall behind on their mortgages.
"There's more supply that's going to come into the marketplace," said Stan Humphries, chief economist at real estate website Zillow.com. "That additional supply will outpace demand."
With concerns about the housing market still prominent, Congress is considering several proposals to extend the tax credit. Senators Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., want to extend it through June 30, and expand it to include all home buyers, at an estimated cost of $16.7 billion.
Realtors and homebuilders are loudly in favour, arguing that the tax credit is crucial to get the housing market back on its feet.
"We are not there in terms of removing the consumer fear factor," said Lawrence Yun, the National Association of Realtors' chief economist.
One potential roadblock to an extension also emerged this week. There are concerns that some of the 1.5 million applications for the tax credit are fraudulent.
Source: Associated Press
October 24, 2009 in World View [of real estate] | Permalink
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Comments
brampton real estate
One of the greatest and most obvious reasons to consider buying a home is the interest rates. Interest rates today, are some of the lowest rates that we have seen in years. It is possible that they will go even lower. You may think that getting a home loan in order to take advantage of these rates is impossible. Although credit standards and loan approval may be higher than before, obtaining a loan is well within the reach of homebuyers with a good credit rating and a steady income that can support the monthly mortgage payments.
Posted by: torontohomeandhouse123 | Jun 11, 2010 3:23:29 AM
It is interesting the statistics, but I am not sure they have gone up that much. If they have it is on the bottom end of the market. The upper luxury end of the market, and condos are still suffering.
Posted by: Manassas VA Homes | Nov 26, 2009 2:53:07 PM
This is what we are seeing in Orange County and the Laguna Beach real estate market. At this point, there are some great buys on the market for those ready to invest. The great thing about some of the coastal areas of the United States, like Laguna Beach, is that these homes are unique, custom and in an area with little land available for expansion. Take a peek at the information that I have - as well as a little personal story about the personal side of real estate!
http://www.lagunabeachrealestatemarketblog.com/2009/11/07/would-you-let-your-mom-talk-to-a-client/
Posted by: Hillary | Nov 7, 2009 3:40:04 PM
This is good sign of real estate in America.Now I have very hopeful in future Real Estate market.
Posted by: House for sale | Nov 1, 2009 11:50:51 AM
This is a great news that at last the real estate market is showing some good signs. Hopefully this will get back to track in coming months.
Posted by: Best Home Mortgage Rates | Oct 27, 2009 1:59:15 PM
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