National Association of REALTORS®: Expect Slow Months Ahead
August 9th, 2010 categories: Chicago Real Estate News
The message from the top economist at the National Association of REALTORS® is clear: Expect some sluggish home sales in the coming months.
Lawrence Yun, the association’s chief economist, said that he expects lower home sales in the next few months. The culprit? The economy.
Yun pointed to job growth as being the key to increasing home sales. If the country starts adding jobs, home sales should increase. If the job market doesn’t improve, home sales will remain down.
Yun also pointed to the expiration of the federal government’s move-up and first-time home buyer tax credits as a reason for the upcoming months of slow sales. These credits – the first-time buyers credit gave buyers a tax credit of up to $8,000, while the move-up buyers credit gave them one up to $6,500 – persuaded many consumers to purchase homes. Unfortunately, they expired at midnight on April 30. Since then, pending home sales have dropped on a consistent basis.
Yun predicted that housing sales activity would pick up late in the year. That probably sounds a bit depressing to many. After all, when the housing market is strong it gives a significant boost to the entire economy. And today’s economy needs all the help it can get. Unemployment is still too high. Foreclosures are barely slowing. Home values are falling. People are still struggling out there.
A boost in home sales would have been nice. Unfortunately, it looks to be something that won’t happen any time soon.
Yun did have some good news, though. He mentioned that interest rates should remain near historic lows. This will allow buyers to continue purchasing more home for less money. Lower interest rates can shave the cost of a mortgage loan by hundreds of dollars every month. This gives buyers more spending power.
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