Home Sales Surge in October
First-Time Buyer Incentive Credited
Existing home sales were up 10.1% in October across the United States, according to a report by the National Association of Realtors. Purchases of existing homes drove total housing inventory down by 3.7%.
Inventories are becoming more in line with demand than they have been in two and a half years, according to the study. Buyers becoming more aggressive in some areas, especially in the lower end market.
The Federal first-time buyer tax credit of $8,000 is being credited with the surge in home sales. Buyers who may have been waiting for the economy to turn around before purchasing a home saw the combination of lower prices, low mortgage rates, and a one-time $8,000 tax credit as too good to pass up. The rush to beat a November 30 deadline spurred folks off the couch and into open houses and realtor’s offices.
Mortgage interest rates are the third lowest on record since 1971, according to the National Association of Realtors—another significant contributor to the movement of existing home inventory in October.
The tax credit, which was set to expire at the end of November, has now been extended to April 30, 2010.
Prices continue to be affected by foreclosures and other distressed properties—so this is an extremely favorable affordability climate for real estate investors. The report states that prices continue to flatten and are poised to rise again in 2010.