Home prices down, sales up, future still uncertain

Home prices and home sales

Home prices fell in the first quarter of 2010 but are still higher than they were a year ago. According to the Standard and Poor’s Case-Shiller report, home prices are up 2% over the first quarter of 2010 but 3.2% lower than the last quarter of 2009.

Existing home sales rose 7.6% in April compared to March, as reported by the National Association of Realtors. Analysts projected an increase in sales of 5.5%, proving a strong month for residential real estate sales of resale homes, pointing to a rush in the market to contract prior to the expiration of the tax credit.

Mixed bag of news

Half of all homes purchased in April were bought by first time homebuyers. Tom Royce of TheRealEstateBloggers said, “The buyers we saw in April were people who were ready to buy, they just moved up their purchase date. So instead of buying in July or August, they have now bought and sales in later months are now cannibalized.”

Mortgage rates are low and are forecasted to hit 4.5% this summer, the lowest rate in over 50 years, but the second quarter sales could be weak, given the expiration of the tax credits for buyers in April. That said, 2010 is certainly outperforming 2009.

CC Licensed image courtesy of zyphichore via Flickr.com.