Pending Home Sales Rise in June. Verdict? Mixed.
Pending home sales rose in June for the fifth straight month, the National Association of Realtors reported this morning, as low home prices and interest rates -- and a tax credit -- juiced sales.
The Realtors' index tracks contracts on previously occupied homes, which makes this different from a new home sales index.
How should you feel about this news?
Well, as we like to say here, "It's better than a poke in the eye with a sharp stick." But it does not mean the housing market is fixed. And remember: These data come from the National Association of Realtors, which would like to put you in a home today!
Housing prices remain very low. Data on new homes released this month showed that the median new home price is down 12 percent compared with this time last year. Existing home prices remain depressed as well.
So much of this uptick has to do with investors snapping up bargains, including foreclosures, and the still-low mortgage rates. The 30-year fixed is at 5.56 percent, which is still a good rate. Goosing the non-investor sales is the $8,000 credit for first-time home buyers, which expires at the end of November.
Also, not all sectors of the housing industry are showing improvement. Sales of large homes still are moribund.
Still: "The broad based gain is another sign that the housing market has finally found its bottom on a combination of low mortgage interest rates, reduced prices, a supply of foreclosed homes, and the government’s incentives for first time home buyers," writes Steven Ricchiuto, chief economist for Mizuho Securities USA.
August 4, 2009; 11:35 AM ET
Categories: The Ticker | Tags: National Association of Realtors, home prices
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Posted by: Dermitt | August 4, 2009 2:30 PM | Report abuse
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