With a struggling economy and slumping real estate sector, all eyes are on signs of recovery which are slowly trickling our way. Home sales are up and prices are down, but are these really signs of a recovery? Perhaps, perhaps not…
For the second month in a row, existing home sales rose, according to the National Association of Realtors with a 10% rise in September. The newest reports from S&P/Case-Shiller note that home prices fell 0.2% in August, but this dip comes after five months in a row of rising prices. Overall, home prices are actually up 1.7% from last year, showing a painfully slow increase.
Lawrence Yun, National Association of Realtors chief economist said, “A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium. But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions.”
New home sales rose 6.6% in September according to the U.S. Commerce Department, and the month’s supply of new homes for sale declined from 8.6 in August to 8.0 in September.
Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich said, “The road to recovery will be a long one, however, and a key hurdle that must be surpassed is the lack of available credit for new-home construction so that builders can meet improving demand for new homes moving forward.”
All signs point toward a recovery as prices are up over the last year at a slow yet bubble-avoiding pace, and existing and new home sales are up. As we’ve been saying all along, however, if unemployment rates don’t improve and if the foreclosure fiasco continues to explode out of control, stats will remain flat as they currently are which is better than declining but no where near a “recovery” as some analysts are calling it. What say you?