 The news of dropping home prices is finally having a positive affect on the market, as existing home sales rise for the month of May 2008. According data collected by the National Association of Realtors (NAR), the number of existing homes sold during the month of May increased 2% from April's numbers. In April, the adjustable annual rate for existing home sales was 4.89 million units. That number rose to 4.99 million units in May. Despite the increase, the sale of existing homes is still 16% below May 2007's rate of 5.93 million units. However, the 2% increase from April to May 2008 could signify that the market is finally beginning to stabilize from the mortgage crisis that has wrecked havoc on the real-estate market that has pushed millions of homeowners into default and foreclosure. The increase in existing home sales also signifies that homebuyers are beginning to get off the fence. Home prices have been falling over the last year and many homebuyers have been waiting for the market to bottom out before purchasing. The increase in sales also reflects the beginning of the summer real-estate season, typically the period with the most home sales. As buyers begin to come down from the fence and start buying the market's overload of inventory, a stabilization of home prices will begin to occur. However, it is important to note that the data lags interest rate cycles and may not represent the actual current state of the market. (Posted by K.Skowronski) |
