US home sales continued to climb in the second quarter, driven by low interest rates, low home prices, and the first-time home buyer tax credit. NAR’s chief economist views this trend as sustainable and key to revival of the overall economy. The following article from HousingWire has more.
The rate of existing homes sales increased between Q109 and Q209 in 39 states, according to a survey by the National Association of Realtors (NAR).
The seasonally adjusted annual rate of national sales of existing single-family homes and condos rose to 4.76m units in Q209, up 3.8% from 4.58m units in Q109, but is 2.9% lower than the 4.9m unit pace in Q208.
NAR chief economist Lawrence Yun said the sales gains appear to be sustainable.
“With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” he said in a statement. “There have been sustained sales gains in Arizona, Nevada and Florida, as well as diverse areas such as Maryland, the District of Columbia and Nebraska. More recently, we’ve seen strong double-digit gains in Idaho, Utah, New Mexico, Washington, Hawaii, New York, New Jersey, Maine, Vermont, Wisconsin, Indiana, South Dakota and Montana.”
Yun believes continued increases home sales will promote activity in the overall economy.
“Given the need for related goods and services, each home sale pumps an additional $63,000 into the economy – that’s how the housing engine traditionally pulls us out of recession,” he said. “In addition, sales are drawing down inventory and that will help stabilize home values, which in turn will lessen foreclosure pressure and boost credit availability for other sectors of the economy.”
But median home prices continued to decline in 129 of 155 metropolitan statistical areas (MSA) from Q109 to Q209.
The national median existing single-family home price was $174,100, down 15.6% from Q208. Distressed sales made up 36% of Q209 transactions.
But NAR president Charles McMillan said there is a sliver lining to the continued decline in prices — increased affordability.
“Housing affordability is hovering near record highs and there’s a wide selection of homes,” he said.
This article is republished from HousingWire. You can also view this article at HousingWire, a mortgage and real estate news site.