WASHINGTON — Home sales rise 9.4 % in Sept., beat forecast
WASHINGTON (AP) — Racing to complete their purchases before a tax credit for first-time owners expires, homebuyers pushed sales up last month by the largest amount in more than 26 years.
After jumping 9.4 percent in September, home resales are up nearly 24 percent from the bottom in January, the National Association of Realtors said Friday. But the housing market’s momentum easily could peter out if Congress doesn’t extend the credit of up to $8,000 for first-time buyers beyond its current Nov. 30 deadline.
Nationwide sales rose to a seasonally adjusted annual rate of 5.57 million last month, from a downwardly revised pace of 5.1 million in August. It was the strongest month in two years, and beat economists’ forecast of 5.35 million, according to Thomson Reuters. Sales, however, are still down 23 percent from their peak four years ago.
In another positive sign, the inventory of unsold homes on the market fell almost 8 percent to 3.6 million. That’s less than an eight-month supply at the current sales pace, and the lowest level since March 2007.
Still, economists caution that the pain from the worst housing bust since the Great Depression probably isn’t over yet.
While home sales and housing construction have risen steadily after hitting bottom earlier this year, most economists believe that prices, which recently stabilized, will resume their descent. The median sales price last month was $174,900, down almost 9 percent from $191,200 a year earlier, and slightly lower than August’s median of $177,300.
The main reasons prices are weak: Unemployment and foreclosures are still rising. With the current 9.8 percent jobless rate expected to rise as high as 10.5 percent next year, foreclosures will continue to set records.
Nationwide, more than 3 million households are either three months behind on their payments or in foreclosure, according to First American CoreLogic, a research firm.
Many delinquent borrowers still are being evaluated for help under the Obama administration’s mortgage assistance plan. If they don’t qualify, the odds are high they will lose their homes.
Sens. Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., want to extend the tax credit through June 30, and expand it to include all home buyers, at an estimated cost of $16.7 billion. Realtors and homebuilders are loudly in favor, arguing that the tax credit is crucial to get the housing market back on its feet.
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