Is the housing meltdown coming to an end?
According to the National Association of Realtors, pending home sales rose in March. The pending home sale index rose 3.2 percent to 84.6 from 83.7 in March 2008. It was also up from February's reading of 82.
It has been a good year for first-time home buyers in Massachusetts who have seized the opportunity with low interest rates, low prices and the government's $8,000 tax credit program which will be in place until the end of this year.
According to chief economist, Lawrence Yun,
"We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around. This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit."
The pending home index measures contracts signed and not yet completed. The up-turn in the index may indicate that home prices have fallen enough to encourage buyers to get off of the fence and into the market.
Looking for the Bottom
Economists are expressing the fact that things look a bit brighter than they did at the beginning of the year. However, with 10 months of inventory currently in many markets, we are looking toward a market with six to seven months of supply to begin a return to normal conditions.
An April Gallup Poll reported that 71% of Americans thought it was a good time to buy a house. And, with houses going under agreement at a more rapid pace, buyers are feeling more of a sense of urgency to put in an offer and go through with a purchase now. The perception is that the market is close to or at a bottom.
"Investors believe the worst of the downturn is behind us," said Mark Zandi, chief economist at Moody's Economy.com. "The economy is still in a recession. But the rate of decline is moderating, and a bottom for the housing market and the overall economy are coming into view."
Copyright 2009 - Claudette Millette, President, TheBuyersCounsel - 800-392-1446, E-mail
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