There were several pieces of news today about the housing market nationally. Sales of existing homes have increased 7.2% to an annual rate of 5.24 million in July, up from 4.89 million in June, according to the National Assoc. of Realtors. This is the fourth monthly increase in a row and represents the highest sale rate since August, 2007.
Ben Bernanke announced at a Fed. Reserve meeting in Wyoming that “The prospects for a return to growth in the near term appear good” in response to the news.
One of the driving forces of the increase in sales is lower prices. The median home price nationally is down 15.1% from a year ago.
At the same time, foreclosure rates are rising, led by Florida and California. Furthermore, foreclosures are no longer largely due to subprime loans. Prime, fixed rate loans now account for 33% of foreclosures, whereas a year ago they represented only 20%. These foreclosures are being driven by rising unemployment, which is expected to peak above 10%.
This is a very sad situation for the many people who have lost their jobs and are in line to lose their homes. But it is an opportunity for people with stable job situations, good stable incomes, and money for a downpayment. They can buy homes at reduced prices as the market adjusts to the recession and the recovery begins.