Sales of existing homes rose 5.5%, the largest monthly percentage increase in five years and the first year-on-year increase since 2005:
WASHINGTON (MarketWatch) — Boosted by foreclosures and plunging prices in the West, sales of pre-owned homes and condos rose sharply in September to the highest level in 13 months, an industry trade group reported Friday.
Existing-home sales rose 5.5% to a seasonally adjusted annual rate of 5.18 million, the National Association of Realtors estimated Friday. Economists surveyed by MarketWatch expected sales to rise to a 5 million pace from 4.91 million in August. See Economic Calendar.
It was the largest monthly percentage increase in five years. Read the full report.
Sales of existing homes were 1.4% higher in September than they were a year earlier; it was the first year-on-year increase in nearly three years.
The report measures home sales closed in September on sales contracts signed one or two months earlier. Credit became less available in late September and in October after the global credit crunch tightened.
What isn’t made clear in the article is that much of the recovery is in just a handful of states, e.g. Colorado, Minnesota, etc., and these starts aren’t the states that are in the most trouble, e.g. California, Nevada, Arizona. I continue to suspect that we’re looking for a countrywide solution to a problem that’s a lot more local than that.
Isn’t part of the solution in places like California for housing prices to become more affordable? It’s my understanding that a household making above median income in California would have had to pay something like 65% of their monthly income to buy a median priced house.
Basically, I think we have a paradox on our hands. I think that the only way to keep the financial system afloat is to keep California housing prices at a bubble level. If we keep California housing prices at a bubble level, it encourages more speculation.
Well the speculators are probably the folks buying half of the houses in California from foreclosure auctions and short sales. Late night infomercials have replaced get rich schemes from real estate speculation with get rich schemes from foreclosure/short-sale transactions. Bless ’em I say, but I hope they learn their lesson a few years from now.
BTW/ my bank (National City) just got sold. Great! The service had deteriorated terribly.
Cheaper housing, new management — a lot of upside is being under-reported!