What are we to do now? Another month of relatively good news in the housing market is welcome news to those of us in the real estate industry and should be welcome news to everyone who owns a home. Funny, again this information was buried on page two of an online internet news site. Why give us good news when there is so much bad to report.
After all the negative stock market readings we have seen over the past week or two, there is finally some good news to report. Today, statistics were released that show Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates, according to the National Association of Realtors®.
The Pending Home Sales Index,based on contracts signed in August, jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8. The index is at the highest level since June 2007 when it stood at 101.4.
Economists polled by Reuters ahead of the report were expecting pending home sales to drop by 1.8 percent.
Lawrence Yun, NAR chief economist, said home buyers were responding to improved affordability. “What we’re seeing is the momentum of people taking advantage of low home prices, “It’s unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we’re hopeful most of the increase will translate into closed existing-home sales.”
Yun notes the unusual timing of contract activity in August. “Home buyers in July were hampered by overly stringent lending criteria in the months before the government takeover of Fannie and Freddie,” he said. “August shows some unleashing of pent-up demand before the credit crisis accelerated in September.”
In speaking with the lenders I deal with on a regular basis, the availability of loans are plentiful, especially in the price ranges under $300,000. This is good news and to me is another reason to listen to and watch the headlines but do not get bogged down in all the doom and gloom. Yes, we are in trying times but come on, we will get through this and be better for it.
Existing-home sales are forecast at 5.04 million this year and 5.41 million in 2009. This follows national declines of 5 to 8 percent in 2008. Home prices are projected to increase 2 to 3 percent next year. Did you read that? Prices are expected to increase next year 2-3%. Get off the fence and lets get moving.
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