Posted on: 23rd Dec, 2009 10:10 am
The November report of sales of previously occupied homes reached the highest level in almost 3 years. This rise has apparently resulted from the measures taken by the Federal Reserve to keep interest rates down along with the $8000 tax credit for first time homebuyers that most expected to run out.
The original expiration date of November 30 on the credit caused lenders to expedite their files so as to meet that deadline, which has since been expanded to June 30, 2010.
Although home sales remain lower than the peak of about 4 years ago, they are decidedly higher than in January (46% higher). By springtime of 2010, however, when the Fed plans to stop buying mortgage-backed securities and the renewed tax credit nears its lifespan, we may see a return to the lower sales numbers of the recent past.
Prices in many locations in the country continue to fall, but the main impetus for the increase in sales seems to have been the tax credit. The "experts" now anticipate a slowing of sales in the next couple of months, with an increase again in spring as we near the end of the tax credit.
Beyond that, it's pretty much anyone's guess as to what will take place. Without stimuli from lower interest rates and tax credits for buyers, will we see a return to the reduction in home sales again?
The original expiration date of November 30 on the credit caused lenders to expedite their files so as to meet that deadline, which has since been expanded to June 30, 2010.
Although home sales remain lower than the peak of about 4 years ago, they are decidedly higher than in January (46% higher). By springtime of 2010, however, when the Fed plans to stop buying mortgage-backed securities and the renewed tax credit nears its lifespan, we may see a return to the lower sales numbers of the recent past.
Prices in many locations in the country continue to fall, but the main impetus for the increase in sales seems to have been the tax credit. The "experts" now anticipate a slowing of sales in the next couple of months, with an increase again in spring as we near the end of the tax credit.
Beyond that, it's pretty much anyone's guess as to what will take place. Without stimuli from lower interest rates and tax credits for buyers, will we see a return to the reduction in home sales again?
I hope this positive trend continues. However, potential changes in some lending guidelines could squash future growth. For example, the changes in the New FHA Guidelines which would require a larger down payment could result in serious declined in home purchases.
Hi George,
The tax credit has no doubt been one of the major driving forces behind this rise in the number of home sales. I believe the extension of the tax credit will take that number further up in the coming year. Besides, the low interest rates on mortgages have also contributed towards the increase in home purchases. Of course, one cannot expect the home sales to reach a height which was attained during the housing boom 4-5 years back. But considering the fact that the sales have gone up by 46% of what it was at the start of 2009, I feel this increase is quite significant. But, it is yet to be seen if this trend continues in days ahead. We have seen such ups and downs and rise and fall throughout the past few years and keeping this in mind, one has to think hard before being too optimistic about this rise in home sales.
The tax credit has no doubt been one of the major driving forces behind this rise in the number of home sales. I believe the extension of the tax credit will take that number further up in the coming year. Besides, the low interest rates on mortgages have also contributed towards the increase in home purchases. Of course, one cannot expect the home sales to reach a height which was attained during the housing boom 4-5 years back. But considering the fact that the sales have gone up by 46% of what it was at the start of 2009, I feel this increase is quite significant. But, it is yet to be seen if this trend continues in days ahead. We have seen such ups and downs and rise and fall throughout the past few years and keeping this in mind, one has to think hard before being too optimistic about this rise in home sales.
it's hard to be optimistic about much of anything in this economy, after all. but a new year is nigh, and with the change over in the calendar, we start a new record-keeping epoch. so what was, was; and what is, is; and what will be, will be (que sera, sera).
