US Existing Home sales rise higher than expected
The US Existing Home Sales rose to an annualized sales rate of 6.1 million units. This is the highest sales pace since February 2007.
The months supply fell to 7 months which is the lowest months supply since also February 2007. Last month the month supply was at 8.0 months. The high reached 11.3 months. A normal market is around 5-6 months. The Median Sales Price fell to $173,100. The gain was a 10.1% gain from last month.
Lower prices, low mortgage rates and the $8000 incentive was cited as the reason for the increase.
The report is positive. However, the market continues to be supported by the selling of foreclosed or distressed properties which accounted for 30% of all sales. Also, the high Unemployment rate continue to be a concern for future sales and foreclosures.
President Obama has extended the first time homeowner credit and also included some exisiting homeowners in the program. It is hard to take away incentives to home owners given 10.2% unemployment and the potential for increased foreclosures/distressed sales.
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