The warmer temperatures have brought, along with seasonal allergies, a sense of hope and perhaps a flurry of optimism to the housing market. Last month, as home buyers felt a sense of urgency to take advantage of the tax credit and an influx of foreclosed homes lured them to the market, pending home sales shot up 8.2 percent, marking the largest margin increase in more than eight years and making this year’s spring selling season better than last year’s. Of course, many wonder how the market will react once the tax incentive ceases to exist. More jobs and economic growth, however, could continue to propel a housing recovery and the return to normal household formation rates.
On another upbeat note, some argue that the immense concern in the housing market may be misplaced. Total sales are only 10 percent below their long-run average and foreclosure-mitigation programs are likely to keep inventory from immediately flooding the market. In other good news, a survey from Fannie Mae found that nearly 70 percent of respondents believe putting their savings in a home is a relatively safe investment. I agree! Buy low, sell high.
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