A LITTLE GOOD NEWS - Index of Homes Pending Sale Jumps 7.4% in August!
FALLING PRICES MAY BE PUSHING SALES IN HARDEST HIT AREAS, ACCORDING TO NAR!
An index compiled by the National Association of Realtors shows pending sales up in August - over 7%. That's the biggest jump in pending sales, or those homes whose owners have accepted an offer but not yet closed, since July of 2007.
Areas where sales have seen the biggest declines in home prices over the last two years - including parts of California, Florida, Arizona, and Nevada, plus the Washington DC area - are seeing jumps in sales.
Is this a trend, or perhaps a blip?
In light of frozen mortgage credit in many sectors, sliding stock markets, and plus-6% Average 30-Year Fixed Mortgage Rates, it might be too early to say the housing market has indeed reached a bottom. Here in Chicago, and across the U.S., housing inventories and foreclosures remain high, and prices will most likely fall further.
Lawrence Yun, Chief Economist for the Realtor's Association, does not expect average home prices to bounce back up again until next year. For 2009, he only expects a modest price gain, nationally, of 3%, or less.
Earlier today, the U.S. Federal Reserve Board trimmed its key Fed Funds Rate Benchmark by 0.5%, to 1.5%. In consort, banks around the world made similar, substantial drops.
However, mortgage rates rarely move up or down in line with Fed moves, and these rate reductions might have little impact on the ultimate price of home financing. Further, lending standards are still very high, as lenders continue their attempts to protect themselves from further losses due to mortgage default.
See AP Writer Alan Zibel's story in today's Chicago Tribune for more info.
DEAN & DEAN'S TEAM CHICAGO
