Lower prices in the housing sector have led to a 5.5 percent increase in home sales in September in the US. People consider this the right time for investment as they have to shell out less money out of their pockets, but this doesn’t apply to the north east of US.
The instability in the US housing market is the main cause of their financial crisis. Thus many economists have their interpretation of the recent increase in sales and a low in prices.
“On the surface, it is encouraging but you have to put it in the context of when did these transactions occur. You’re now faced with a high hurdle…it is unlikely this sales rate is going to be sustained.” said Jonathan Basile, who is an economist at Credit Suisse in New York.
“A tight labour market, tight credit and wide mortgage spreads should dampen demand enough to depress sales.” commented Patrick Newport, of IHS Global Insight in Massachusetts.
Economists also showed another angle by saying that may be the house sales have increased due to the bargain prices on foreclosed homes.
The irony is that this would only add to the housing crisis rather than improving the condition.
As per the National Association of Realtors, there has been a 9 percent fall in the median home price as compared to September 2007. It is now $191,600. The pace of previously owned home sales has also increased incredibly in September i.e. of 5.18m annualized units
According to the NAR survey, western US have seen the highest increase in its sales which is 16.8 percent jump in September.
Even in the Midwest and south the home sales have increased by 4.4 percent and 2.2 percent respectively.
