New home sales in May were the strongest in two years. This could suggest a modest housing recovery for the battered real estate market. In late June, the Commerce Department said that sales of new homes increased by 7.6% in May from April to a seasonally adjusted annual rate of $369,000, which is the best pace since April 2010.
This is significant because that was the deadline for consumers to take advantage of the $8,000 housing tax credit. Sales aren’t the only signs that things are getting better in the housing market – builders across the country are building more homes. Inventories of new homes are near all-time lows. But it’s not just new homes that are doing well. In Miami, a mini-condo boom is taking place as investors from overseas are looking to put their money into good real estate investments.
At NAR Midyear in Washington, D.C. in May, NAR Chief Economist Lawrence Yun personally told me that the first quarter of 2012 was the best quarter we have seen for transactions in five years. In April, prices rose in most of the country. The Case-Schiller Index reported that U.S. home prices rose by 1.3% for the month. Record low interest rates and fewer bank-owned properties being sold helped with sales volume and appreciation. So does this mean that it’s time to prepare for another housing boom? Many experts say not to get excited yet.
Most experts agree that things are indeed getting better for housing. This is great news for homeowners and real estate professionals. These same experts also warn not to get too excited yet, as the recovery process will be long and slow. There are many other factors that will come into play in the coming months: the Presidential elections, interest rates, the European Crisis, and China’s reported slowdown are just a few factors that could cause a setback.
Additionally, this year has been the strongest year for real estate sales since 2007, which is significant for homeowners, buyers and real estate professionals, because this stability and confidence can drive a real estate market up. With the controls that have been put in place to prevent future housing crashes, things are looking very bright for the housing market.
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