Home Resales Nationwide Up Nearly 24 Percent From January 2009…
Racing to complete their purchases before a tax credit for first-time owners expires, homebuyers pushed sales up last month by the largest amount in more than 26 years.
After jumping 9.4 percent in September, home resales are up nearly 24 percent from the bottom in January according to the National Association of Realtors.
Nationwide sales rose to a seasonally adjusted annual rate of 5.57 million last month, from a downwardly revised pace of 5.1 million in August. It was the strongest month in two years and beat economists' forecast of 5.35 million.
In another positive sign, the inventory of unsold homes on the market fell almost 8 percent to 3.6 million. That's less than an eight-month supply at the current sales pace, and the lowest level since March 2007.
While home sales and housing construction have risen steadily after hitting bottom earlier this year, economists warn that prices, which recently stabilized, could resume their descent. The median sales price last month was $174,900, down almost 9 percent from $191,200 a year earlier, and slightly lower than August's median of $177,300.
The main reasons prices are weak: Unemployment and foreclosures are still rising. With the current 9.8 percent jobless rate expected to rise as high as 10.5 percent next year, foreclosures will continue to set records.
Nationwide, more than 3 million households are either three months behind on their payments or in foreclosure, however many delinquent borrowers are still being evaluated for help under the Obama administration's mortgage assistance plan.
Senators Johnny Isakson and Christopher Dodd want to extend the tax credit through June 30th and expand it to include all home buyers, at an estimated cost of $16.7 billion. This extension remains to be seen but most economists believe an extension would continue to help the troubled housing market.