The recent increase in pending home sales is a positive development for the
unsettled housing market, reflecting the improvement in credit markets and the
overall economy. This upswing in the volume of signed contracts to buy existing
homes proved to be better than what was anticipated, actually surpassing levels
from around this same time last year. Home prices need to continue to stabilize
before the real estate market recovery will fully materialize. Here is some
relevant information on the housing market and its impact on the economy:
-
Low interest rates, more affordable housing, and the $8,000 tax credit are
contributing to the rise in pending sales of existing homes.
-
Not all housing markets are the same. Some markets continue to depreciate
while others are actually appreciating. Local real estate and mortgage
experts are good sources of local knowledge.
-
Mortgage credit markets, supported by the commitment of the Treasury
Department, created the environment for homeowners to refinance into
lower-rate, fixed loans, boosting homeowner’s discretionary budgets. The
broader economy has directly benefited from this, reflected recently in retail
sales and consumer savings rates.
-
Sustained improvement in the housing market requires assistance from the job
market and a continued low rate environment. The government has committed
to providing the needed stimulus in both areas to ensure this improvement.
Housing markets are measured locally. Continue to be aware of the factors
in your community—plant closings, new business starts, homes for sale, and
foreclosure rates—to get a more accurate indication of where your community
stands in the recovery. In addition, check with local experts, such as
real estate and mortgage professionals, for information.
