Economic Reports, Existing Home Sales, Market Insight

May 2010 Existing Home Sales Is Better Than The Headline

June 23, 2010 by · 1 Comment 

Existing Home Sales May 2009-May 2010Existing Home Sales dropped in May for the first time in 3 months but still managed to post its second-highest since November 2009, buoyed by the expiring federal tax credit program.

An “existing home” is a home that cannot be considered new construction; a resale of an existing home.  Existing Home Sales fell 2.2 percent in May.

The press is calling the drop in sales “unexpected” and disappointing, but a deeper look at the data shows the news isn’t as bad as it first appears.

First, on a regional basis, sales were mostly solid. Only the Northeast region posted a loss. The West even managed a gain.

  • Northeast : -18.3 percent
  • Midwest : 0.0 percent
  • South : +0.5 percent
  • West : +4.9 percent

Second, the supply of homes for sale dropped to 8.3 in May and, because home prices are based on supply and demand, this is a positive for pricing.

By comparison, in 2008, the average existing home inventory was 10.4 months.

Lastly, first-time home buyers represented 46 percent of all buyers in May. The number was likely buoyed by the tax credit program but that doesn’t damper the fact that first-time buyers provide a support floor for the housing market. 

First-time buyers in Crown Point Indiana enable “existing owners” to move-up to bigger homes, which in turn trickles up to the mid-size and jumbo markets.

Analysts expected more from May’s numbers and that may explain why the reaction to the data is generally negative.  However, in many cities, home resales did just fine.

Related Posts Plugin for WordPress, Blogger...
Be Sociable, Share!

James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

More Posts - Website

Follow Me:
TwitterFacebookLinkedInPinterest

  • Get your FICO Score with Score Watch® today! Click here!

Comments

One Response to “May 2010 Existing Home Sales Is Better Than The Headline”

Trackbacks

Check out what others are saying about this post...
  1. […] This post was mentioned on Twitter by John Durso and WelcomeHomeNWI.com, James K Barath, CMPS. James K Barath, CMPS said: Did You Hear: May 2010 Existing Home Sales Is Better Than The Headline http://bit.ly/d50maO #trerblog #li […]



Speak Your Mind

WelcomeHomeNWI.com