Existing Home Sales Increase in April
April saw an increase in existing home sales. When the National Association of Realtors broke the numbers down further, there were two very interesting trends that came out of it:
- 40% of home buyers are first time home buyers.
- 45% of home sales were distressed properties.
This information offers an interesting snapshot of what is going on right now. A number of people are realizing that they have an unparalleled opportunity to buy a home. First time home buyers understand that now is a great time to get involved in a home purchase. Government tax credits, low mortgage rates and home prices that continue to fall all provide impetus for movement.
Also interesting is the fact that almost half of home sales in April were of distressed properties. This is real estate that is in foreclosure, or near foreclosure. Obviously, these types of homes make real bargains; many are looking for ways to get homes below market value. Short sales are rising in popularity, as well as seller motivated price reductions on homes.
Economy picking up
The rise in home sales is an indication that the economy is ready to begin picking up. Even with home prices down, there are signs that the housing market is stabilizing overall, and that is expected to be good for the economy. Additionally, a survey of economists reveals that a vast majority of them expect the recession to be over by the end of the year, meaning that home prices — and sales — are likely to rise toward the end of 2009 and 2010. However, things are low enough right now that it will take some time for recovery.
Indeed, it is important to make the distinction between the end of the recession and economic recovery. The end of the recession merely indicates when the economy stops contracting; economic recovery is expected to be a longer process of restorting economic growth.
May 28th, 2009 at 11:03 am
[…] been a fairly eventful couple of days in terms of mortgage market news. Not only have existing home sales increased, but there is new data for foreclosures, new home sales and mortgage rates […]