Home prices rose in approximately 60 percent of U.S. cities in the first three months of 2010. This may be a sign that the housing market is starting to stabilize,many thanks to billions of dollars in federal spending.
The median sales price for previously occupied homes rose in 91 out of 152 cities tracked in the January-March quarter versus a year ago, according to the the National Association of Realtors's statement on Tuesday.
The homebuyer tax credits - $8,000 for new buyers and $6,500 for current owners - helped bring up home sales this spring as many buyers raced to purchase a home in time to qualify before the incentives expired at the end of April. Sales of previously occupied homes surged in March after a three-month decline caused in part by harsh winter weather. In total, approximately 2.2 million buyers had used the first-time buyer credit as of late March. The cost for this programs rounds out at about $16 billion, according to the Internal Revenue Service.
The NAR is projecting prices will increase "very modestly" in the second half of this year, assuming unemployment and the economy don't take a turn for the worse. With the housing tax credits now over, many experts anticipate home sales will soften in the near term, and that could slow down some of the momentum in home price increases.
Prices also could be hurt as banks unload their backlog of foreclosed homes. And despite rising prices, nearly a quarter of all U.S. homeowners with a mortgage, still owe more on their loans than their homes are worth.
With all good news, comes reality. We are seeing prices rise a bit on homes, however, we have a lot of obstacles to overcome before we can take a sales increase as a sign of recovery, however let's continue to think optomistically that the sale price increase and sales increase are a sign that recovery is not far behind instead.
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