The surge toward November
by drm on June 4, 2009
Momentum appears to be building in the housing market and the summer is shaping up to be stronger than many — including me — had anticipated.
The recipe? A $8000 rebate that expires at the end of November, coupled with continuing price declines that help to offset a slight rise in mortgage rates.
I do wonder what happens after the subsidy expires. The market is unlikely to have worked off all the distressed inventory (the continuation of a weak job market will drive more homes into foreclosure), and so the supply/demand balance is likely to remain skewed while artificial stimulants for purchases drop off.
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Pending home sales rebounding
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The Pending Home Sales Index from the National Association of Realtors rose 6.7% in April after jumping 3.2% in March. That was far above the forecasts of experts surveyed by Briefing.com, who predicted a 0.5% increase. The index was 3.3% higher than 12 months earlier. |
“Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” said Lawrence Yun, NAR’s chief economist in a prepared statement. “Since first-time buyers must finalize their purchase by Nov. 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.” |
Also driving sales is falling home prices. The national median home price is down more than 30%, according to the S&P/Case-Shiller Home Price Index. That has drawn many bargain-hunting homebuyers back into the market. |
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Tagged as:
chief economist,
Lawrence Yun,
National Association of Realtors,
S&P/Case,
USD
