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WASHINGTON (Reuters) - Pending sales of previously owned U.S. homes shot up by 6.7 percent in April, the biggest monthly gain in 7-1/2 years, according to a report on Tuesday that buttressed views the U.S. recession was easing.
The National Association of Realtors said its Pending Home Sales Index, based on new sales contracts, rose to 90.3 in April from 84.6 in March.
It was the third straight monthly increase and the largest jump since October 2001. The monthly gain took the index 3.2 percent above its year-ago level in the latest sign the battered U.S. housing sector was stabilizing.
***
Lawrence Yun, senior economist at the Realtors' trade group, credited improved home affordability and a new government program that provides an $8,000 tax credit for first-time homebuyers for the surge in U.S. buying activity.
The NAR said its Housing Affordability Index, which blends factors like home prices and mortgage rates, was "in record territory" with 30-year mortgage rates hovering around 5 percent and an abundance of homes on the market.
WASHINGTON (Reuters) - Pending sales of previously owned U.S. homes shot up by 6.7 percent in April, the biggest monthly gain in 7-1/2 years, according to a report on Tuesday that buttressed views the U.S. recession was easing.
The National Association of Realtors said its Pending Home Sales Index, based on new sales contracts, rose to 90.3 in April from 84.6 in March.
It was the third straight monthly increase and the largest jump since October 2001. The monthly gain took the index 3.2 percent above its year-ago level in the latest sign the battered U.S. housing sector was stabilizing.
***
Lawrence Yun, senior economist at the Realtors' trade group, credited improved home affordability and a new government program that provides an $8,000 tax credit for first-time homebuyers for the surge in U.S. buying activity.
The NAR said its Housing Affordability Index, which blends factors like home prices and mortgage rates, was "in record territory" with 30-year mortgage rates hovering around 5 percent and an abundance of homes on the market.
Known problems with any claim of recovery:
[] Growing foreclosure and late payments on mortgages
[] Contraction in the Service Sector, the major employer in the USA
[] Currency shortage due to outstanding obligations far exceeding money tokens available (one of the reasons why banks desperately needed the "bail out" cash)
[] Socialist obligations far outstrip the resources of the U.S. government and taxpayers (think how UAW contributed to the demise of the Big 3).
[] Short term profit taking relies on deceiving investors to come into the pool, just before the plug is pulled
When you're rising from the depths of hell, an increase of 8.7% is a teaspoon in the ocean. Penny stocks increase by 100%, but that doesn't make the investor rich.
Also, "Lawrence Yun, senior economist at the Realtors' trade group, credited improved home affordability and a new government program that provides an $8,000 tax credit for first-time homebuyers for the surge in U.S. buying activity"
-- first time homebuyers? In this economy? Oh nooooo....
Looking at it from a common sense perspective, I do not see how this is good or can result in any good if this is true. House prices are still far to high in many areas to even support an economy before this issue. People could not afford the outrageous prices then and so it seems very unlikely that with the tightening of the economy that people could afford them now with the loss of jobs in many areas and the reduction of wage in many fields by companies. If people do start buying again at high prices, my guess it would simply be a delaying the inevitable result. Eventually those poor purchases will catch up with people and we will be back in the same position again.
Prices need to come down by a much larger amount before it becomes reasonable to purchase a home in some of these areas. A home that has dropped from 800k to 600k seems like a big drop, but when the house is only worth 200k, its a suckers buy.
Also, "Lawrence Yun, senior economist at the Realtors' trade group, credited improved home affordability and a new government program that provides an $8,000 tax credit for first-time homebuyers for the surge in U.S. buying activity"
-- first time homebuyers? In this economy? Oh nooooo....
exactly! and I hope everyone knows this credit is for people with small incomes. So the people who this tax credit is directed to are likely not buying homes right now anyway! It is complete absurdity.
I keep waiting for signs of this to affect the market but I havent seen it yet...either it's being propped up or we're looking too early... ?
Too early IMO, although the huge mall property owner going BK should be a sign.
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) or we're looking too early... ?
