Existing home sales have been of interest since the recession began. March figures for existing home sales rose by 6.8%. The first time homebuyer credit was likely to have helped. Because so many people had been hard up to get the financing, and others went running for mortgage loan modification, any modest gains in real estate are welcome signs of relief.

Inventory had something to do with existing home sales

Existing home sales are single family homes not newly constructed. The National Association of Realtors recently released its monthly report concerning existing home sales, and things are starting to look up. More homes are available, which means lower prices. It’s a great time to buy, but it still isn’t that you’ll be able to buy a home with a couple payday loans.

There’s also more inventory

CNN reports that inventory increased by 1.5%, with 3.58 million homes available. The median price of a home rose 0.4% to $ 170,000. The home supply dropped to an 8 month supply from an 8.5 month supply, meaning it would take that long to sell all available homes at current pace. Single family home sales rose 7.3 percent, to a rate (homes sold per year) of 4.68 million, up from 4.36 million in February. According to the NAR report, 44 percent of sales were to first time homebuyers, up from 42 percent in February.

How did it spike so fast?

January and February weather usually affects home sales, and it was a turbulent season. The first time homebuyer credit probably helped too. An $ 8,000 credit off the tax bill may have encouraged some homebuyers who were on the fence. NAR Chief Economist Lawrence Yun said the tax credit “has been a resounding success.”

Distressed and foreclosed homes

35 percent of sales were of foreclosed or distressed homes. Cautious buyers will often be attracted by lower prices. About foreclosures, Yun said “In fact, foreclosures are selling quickly, especially in the lower price range that are attractive to first time homebuyers .”

Is the housing recession done?

If we all remember Econ 101, markets constantly adjust to market conditions – simple supply and demand. Depressed markets drive up supply, drive down demand and therefore price. Lower price means people that are buying get deep discounts on commodities. The supply begins to decrease, and price and demand begin to rise. The market is recovering naturally, as it always was going to.

Sources

National Association of Realtors

http://www.realtor.org/press_room/news_releases/2010/04/ehs_favorable

CNN

http://money.cnn.com/2010/04/22/real_estate/March_existing_home_sales/

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Tags: Existing home sales, first time homebuyers, mortgage loan modification, Payday loans

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