Lower house prices help increase Existing-home sales in May

Existing-home sales had increased in May, this was a direct result from lower house prices, this is according to the National Association of Realtors. Existing-home sales which also include co-ops, condominiums and townhomes had increased by 2 percent to a seasonally adjusted annual rate of 4.99 million units in May; this was from a level of 4.89 million in April. However; do not get too exited about the news, as these figures are 15.9 percent below the 5.93 million-unit pace from May 2007.

NAR President Richard F. Gaylord, has said “Home buyers are starting to get off the fence and into the market, drawn by drops in home prices in many areas and armed with greater access to affordable mortgages,” he said. “Today’s buyer plans to stay in a home for 10 years, which is a good strategy for building long-term wealth.”

The average house prices in May were $208,600, at the same time last year it was at $222,700. Lawrence Yun, NAR chief economist ha said “The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down.” He then went on to say “Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets. Foreclosures and short sales appear to be a larger part of the market, particularly in California, and are creating a drag on current home prices.”

Things are still not looking good in the housing market though, as the total housing inventory in May fell 1.4 percent, to 4.49 million existing homes available for sale. Across the country there are mixed figures for house sales, some areas that are experiencing higher sales than in May 2007 are Battle Creek, Mich, Monterey County in California, Sacramento, San Fernando Valley, and Sarasota, Fla.

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