Home sales rise in May (but only a little)

Posted by: Prashant Gopal on June 23, 2009

Existing home sales rose 2.4% in May — the second consecutive monthly increase, the National Association of Realtors said today. But the May level — adjusted for seasonal variations — was lower than some economists had predicted.

The important thing here is that home sales aren’t falling, indicating that a bottom might be near. Michelle Meyer, economist with Barlays Capital in New York, told me that she thinks the increase is good news. But she also pointed out that the sales that closed in May went into contract a month or two earlier. So the rising interest rates have yet to be factored into the sales data.

Interest rates for a 30-year fixed mortgage have increased from 5.13% on April 1 to 5.76% on June 17, according to Bankrate.com.

“It reflects housing conditions in April, prior to the runup in mortgage rates,” Meyer said. “I don’t know how it will respond to the jump in mortgage rates in the last month.”

Reader Comments

chillin

June 29, 2009 6:44 AM

In my 63 years of life, I can't recall how unstable our American economy is today..with prices on almost everything jumping around so much. As I recall, the Reagan years put a lot of Americans under bridges and on the streets due to his hard stand on new federal housing building for the poor..he just refused to build anymore of them.
Interest rates went up as high as 18 per cent on new homes, cars etc..,unemployment was high and Reagan's fear of Russia prompt him to over spend in our military.,driving this country into a deficit
In the late sixties, prior to the end of the Vietnam war (1975) through much of the 1970's up until Reagan took office, I used to see homes being built so fast, a completed tract of homes would be up withing weeks..Then the meltdown started with Reagan..construction on new homes stopped and used ones sat unsold for years..I saw one home in our area sat unsold for 12 years..Then Clinton took office, interest rates went down, credit was easier to get, homes began to pop up everywhere..jobs were created.
Things did stablilize up to a point..to included oil prices.
Today with so many changes happening all the time I don't think even the professional real estate experts can predict to us that homes values will start to go up soon, or that the prices of new or used homes will come down..reason is that the economy is very very unstable.
The experts have never lived thorugh a enonomic unstabled mess we are in now.
And I truely don't see how this country will ever have that luzury of a stabalized economy we could all set our budgets to day in and day out again.
Even the simple price of gasoline that can increase to 15 cents a gallon overnight has a tremedous impact on the American peoples budget..I know it does on my family.
So much for your predictions on housing
values getting better in the future.
They may go up in price, but the credit , jobs, and money won't be so easy to get to buy as many new homes like before..so values will go down like in the Reagan 80's, and houses will just sit there, unsold..,and I think builders will build less different choices of homes for the consumer and build them more custom to their needs..at least that;s what took place in the 1980s..
I can also tell you in my neighborhood, many foreclosed homes are being purchased from people out of state, some by people in South America, Mexico and Europe,, and have started to rent them out to Americans... try doing that in their countries.

Mark Jacobs

June 29, 2009 7:09 PM

I think we are just seeing the summer market that we see every year.

See Augusta Market Information @ Http://www.markjacobsrealtor.com

Great trend information

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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