Pending Sales of U.S. Existing Homes Increased 4.1% in March
Signed contracts to buy U.S. homes rose more than forecast in March as low interest rates drew buyers back into the market.
The index of pending home purchases rose 4.1 percent to 101.4, the highest level since April 2010, after a 0.4 percent gain in February that was revised from a previously estimated 0.5 percent drop, the National Association of Realtors reported today in Washington. The median forecast of 43 economists surveyed by Bloomberg News called for a 1 percent rise in the measure, which tracks contracts on previously owned homes.
An improved labor market and mortgage rates near historic lows are helping to stabilize housing. At the same time, the industry remains the economy’s weakest link, depressed by the threat of more foreclosures, stricter lending standards, and lower property values.
“Housing demand this year will continue to recover moderately,” Yelena Shulyatyeva, an economist at BNP Paribas SA in New York, said before the report. Even so, the glut of new foreclosures is likely to start pushing prices down in the second half of this year, she said.
1. Sales of pre-existing homes in my area have also skyrocketed.
I live near a large military base and new construction has remained steady.
Unfortunately, the bulk of pre-existing home sales are to landlords and not families who plan to live there. These homes are being purchased below market value by "people of means," made inhabitable and rented (often to soldiers) at an inflated price.
This area has definitely become a community of renters while the upper income/low interest investors are realizing high returns on these investments. Low interest loans are not often obtainable by families wishing to purchase these homes.
Alternately, families can get higher interest rate loans to purchase, price inflated new homes, rather easily.
Back at the ranch, the banksters borrow money from the fed at or near 0% interest. Funny how that works....