In April, Existing home sales and prices rose. The home sales report issued Monday, which exceeded expectations, is undeniably rare good news for the U.S. economy. Nevertheless, the surge in national home sales and home sale prices was driven by home buyers which were rushing to get the home buyer tax credit 2010, which expired at the end of April. . The effects of the subsidy are expected to fade which will leave the real estate market at the mercy of the US unemployment rate.
Home sales beat forecast
Existing home sales increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April from the month before, according to the home sales report that was released by The National Association of Realtors recently. Loan lenders arranged transactions for 5.36 million home sales in March. From the exact same month a year ago, sales were up 22.8 percent. CNNMoney.com reports the gain in national home sales was anticipated, but nevertheless beat forecasts. Briefing.com surveyed analysts looked for resale’s in April to rise to a rat of 5.56 million units.
2010 home buyer tax credit
Existing home sales were pushed up as buyers counted down to the home buyer tax credit 2010 expiration date of April 30. When new home buyers got $8,000, trading up could mean getting a $6,500 credit. The real estate industry is bracing itself for a bumpy road ahead now that the home buyer tax credit is gone. The Wall Street Journal reports that last week this anxiety grew when the Commerce Department reported that while home construction rose in April, permits for future building fell off a cliff. The drop showed builders are expecting demand to drop for new homes following a 26.9 percent surge in March.
Home sale prices pushed up by surge
The surge of buyers taking advantage of the 2010 home buyer tax credit made the existing home sale prices rise. The Washington Post reports that the national median existing home price from all different property types — single-family homes, townhouses and condominiums — was $173,100, which is up 2 percent from March and 4 percent from April 2009. April’s bump is the largest year-over-year price increase since May, 2006. According to the National Association of Realtors, the key to stabilizing prices is clearing out the glut of homes. The group explained also that the raw number of unsold homes in about 12 percent below the July 2008 peak.
National home sales report
Other figures in the national home sales report contain a rise in total inventory of 11.5 percent at the end of April, representing an 8.4-month supply, up from 8.1-month supply in March. That means it would take 8.4 months to sell all the homes that are for sale at the current pace of purchasing if no a lot more homes are added to the market. Permits are dropping because existing home sales will be higher than new home sales. Existing homes cost less, and a surging rate of foreclosures is filling the market with dirt-cheap deals.
