The National Association of Realtors said Friday that sales of existing homes rose by 5.5 percent in September compared to August, the best showing since a 5.6 percent increase in July 2003, during the five-year housing boom.
By region of the country, sales soared by 16.8 percent in the West and rose a more moderate 4.4 percent in the Midwest and 2.2 percent in the South. The only region of the country which saw a decline was the Northeast, where sales fell by 1.1 percent. New home sales have increased by 2.7%. And, while median home prices have dropped to the lowest level in four years, investors are pleased that the market is beginning to chip away at an inventory glut.
More Good News
The government will begin doling out $125 billion to nine major banks this week as part of its effort to contain a growing financial crisis, a top Treasury official said Monday. This will mark the first deployment of resources from the government’s $700 billion financial rescue package passed by Congress on Oct. 3. Home mortgage rates continue to decline, but many mortgage executives are concerned that it’s too little too late. FHA home loans have been the most popular mortgage for first time homebuyers.
Assistant Treasury Secretary David Nason said the deals with the nine banks were signed Sunday night and the government will make the stock purchases this week. The deals are designed to bolster the banks’ balance sheets so they will begin more normal lending.
Signs of Limited Credit Thaw Emerge in Money Markets
Banks cut the rates they charge each other for overnight loans in U.S. dollars and Euros on Friday, and the rate on one-day corporate IOUs eased from Thursday, providing tentative signs that some corners of the credit market are thawing. But, it will take some time for credit to thaw enough to where consumers can get loans.
The economy didn’t falter overnight, “and it’s going to take a while for the credit system to thaw,” Bush said just before the markets opened, speaking across a park from the White House at the U.S. Chamber of Commerce building, a symbolic headquarters of American business.
While the credit freeze affects conventional mortgage loans, FHA, VA and other government-backed loans still have reasonable credit underwriting. Homes are starting to sell. Prices are low, and sellers are willing to accept offers from buyers who are approved for government-backed loans. Take advantage of the market. Fill out the free loan quote form on this site to see what you may qualify for.
