spc

Existing Homes Sales Rise, Foreclosed Houses Sales Fall

July 24, 2009

Nationwide, total sales of existing homes increased for the third straight month in June while sales of foreclosed houses dropped to 31 percent of total sales, according to an analysis of U.S. residential real estate sales for the month of June.

Encouraged by lower mortgage rates, federal tax incentives, lower prices of foreclosed houses and bigger inventories of homes for sale, people decided to pursue their home ownership and home purchase plans.

According to the data, total sales of existing homes jumped to an adjusted yearly pace of 4.89 million, marking an increase of 3.6 percent. Analysts said this yearly rate was the highest rate since October last year and was higher than what they predicted.

Stuart Hoffman, the top economist of PNC Financial Services Group, said that the housing market has finally bottomed out. He said his total sales projection for June was 4.9 million, which was right on the dot. He added that the unemployment rate is rising, but higher home affordability has been offsetting its effects.

The higher total sales of existing homes nationwide for the month of June also affirmed the statements of Federal Reserve Chairman Ben Bernanke about the national economy. He said that the housing sector appears to be starting its recovery from the harsh effects of foreclosed houses.

But Bernanke also warned that the recovery is being slowed down by a significant decline in household wealth and the rising unemployment rate. He also pointed out the effects of prices of foreclosed houses on declining property values.

Previously, in a survey by Bloomberg News, economists predicted that sales of existing homes for June would increase to an adjusted yearly rate of 4.84 million compared to the 4.77 adjusted yearly rate for May. This prediction is also close to the nationwide total sales figures just released.

On the other hand, based on national housing data, the number of homes for sale nationwide in June decreased to 3.82 million, a drop of 0.7 percent. At this inventory level, approximately 9.4 months are needed to sell all the homes for sale.

In May, the inventory of homes for sales was worth 9.8 months. According to real estate analysts, a home supply worth 7 months has been the supply level during normal times. They predicted that property values may stabilize by the end of the year or early next year.

Lastly, they also said that the median price for existing homes in June dropped to $181,800, compared to the $215,000 median in June 2008, as the prices of foreclosed houses pulled down median prices.

Related Posts:

Comments Off
Filed under category:Foreclosed Homes

Comments are closed.

corner