Existing home sales increased by 5.1% in February to an annual pace of 4.72 million units compared to market expectations for a small decrease to a rate of 4.45 million. February’s gain was the strongest since July 2003 however; sales remain 4.6% lower on the year and are down 34.9% from their September 2005 peak. The rate of decline has slowed in recent months suggesting a bottom may be near. February’s gain was broad based with sales increasing in all regions of the U.S. The inventory of homes available for sale climbed 5.2% to 3.798 million which represents a 9.7 month-supply at the current sales pace. Home prices continued to plunge because of the high number of distressed sales. It is estimated that 40-45% of all home sales are foreclosures or short sales but up to half are first time buyers. The median price for an existing home fell 15.5% over the past year to $165,400 as the average price declined 13.4% to $209,700. While the upside surprise in sales figures last month was welcomed news it is a long road to recovery for the housing market. Inventories remain high and prices are depressed because of the distressed properties coming on the market. The NAR is hopeful that demand can be fostered through the $8000 first-time buyer tax credit and other economic stimulus programs that help create jobs.
Much of this is good news but with more and more home owners at risk each month of losing their home to foreclosure you can count on a Long Road to recovery for the housing markets. I don't want to be a doom and gloomer but in all reality our economy is in the tank and it doesn't correct itself or repair itself over night.
The good news is that Utah is predicted to be on the leading edge of the recovery. We were one of the last states to see home prices plummet so how fortunate we would be to be one of the first to find the bottom.
With $8,000 tax credit from the fed's combined with the $6,000 home run grant from the state of Utah you have $14,000 in free money (restrictions apply). Put that together with the lowest interest rates in 50 years and the lowest home prices in 10+ years and you have the makings of a strong push upwards in the housing market. Spread the word...
Stetson Lowe
Utah Mortgage Insider - Apply @ www.utahloantips.com
