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U.S. Existing Home Sales Continue to Rise Upward

December 24th, 2009 · 1 Comment · Mortgages, Real Estate

by Kristy Welsh

(Last Updated On: February 9, 2017)

The combination of low mortgage rates, tax incentives and plenty of inventory to choose from seems to be working to stimulate home sales, according to the latest figures released by the National Association of Realtors (NAR). The numbers for existing home sales (which includes single-family, condominiums, townhomes and co-ops) for the month of November were up 7.4% over the previous month, and were nearly double the level of November 2008, up 44.1% from the previous year. The current sales numbers are at the highest level since February 2007, when they hit 6.55 million.

The large jump for the month is due in part to the originally scheduled November 30 deadline for the first-time homebuyer tax credit, with many buyers scrambling to take advantage of the (projected) final days of the offer. According to NAR, approximately half of home sales in both October and November were first-time homebuyers. The first-time homebuyer tax incentive, which provides up to an $8000 tax credit to qualified borrowers, was extended and expanded on November 6, 2009. The revised legislation extends the original tax credit for first-time homebuyers through April 30, 2010, while expanding the incentive to include a $6500 tax credit for move-up or repeat homebuyers.

Here are NAR existing home sale statistics broken down by region:

Northeast:  Regionally, existing home sales in the Northeast rose 6.6% to an annual level of 1.13 million in November, and are 52.7% higher than November 2008. The median price in the Northeast was $223,400, down 13.1% from a year ago.

Midwest:  Existing-home sales in the Midwest increased 8.4% in November to a pace of 1.55 million and are 53.5% above a year ago. The median price in the Midwest was $140,800, a decline of 0.4% from November 2008.

South:  In the South, existing-home sales rose 4.8% to an annual level of 2.39 million in November and are 44.8% higher than a year ago. The median price in the South was $151,400, down 1.4% from November 2008.

West:  Existing-home sales in the West increased 10.6% to an annual rate of 1.46 million in November and are 28.1% above November 2008. The median price in the West was $231,100, which is 4.1% below a year ago.

So what can we expect as we enter 2010? Speculation is that interest rates will begin to climb, as economic indicators seem to be supporting this possibility. The inventory of homes on the market has been gradually shrinking to more “normal” levels, and this will likely begin to spark the stabilization of home prices. Tax incentives for homebuyers will continue to draw more activity to the market, and the traditionally active spring real estate market will likely be particularly bustling this year.

Are we out of the woods yet? I’m not qualified to speculate, but there are certainly some positive signs around us. If you are in a position to enter the real estate market, it may well be the tail end of the bottom, and worth consideration (contingent on your location, of course). Just something to think about as we enter the new year.

Readers, how do you feel about the real estate market, is it on the way to recovery? Share your thoughts by leaving a comment!

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One Comment so far ↓

  • Nancy Tossell

    Without a doubt, the government programs are making a difference and hopefully, with more homes being purchased, this will in turn help get the economy going with people getting their homes in order. I do feel we are making progress but also believe this recovery will take several years at least. I can’t help but be concerned with the segment of the population who have been getting by on savings and using money from their retirement programs.

    Overall, this economy has helped people to rethink their priorities and we have the opportunity to come out stronger in the long run.

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