Real Estate Market

Strong buyer activity in lower price ranges has helped raise existing home sales by 2.9 percent in April, according to a recent report by the National Association of Realtors (NAR). Housing analysts have revised their forecast and are predicting existing home sales volume of 4.68 million units for 2009.

According to Lawrence Yun, NAR chief economist, the increased activity can be attributed to both newer demand from first-time home buyers, and a seasonal rise in interest from repeat buyers. "Most of the sales are taking place in lower price ranges and activity is beginning to pick up in the mid-price ranges," he said.

The current market appears to have a broad-based appeal. An April survey revealed first-time buyers declined to 40 percent of transactions, implying that more repeat buyers are engaging during the home-buying season. Buyers looking at homes has increased 14 percentage points from a year ago. "This is consistent with our forecast for home sales in the latter part of the year to be 10 to 20 percent higher than the second half of 2008," Yun said.

Freddie Mac reported that the average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.81 percent in April, down over a point form the this time a year ago.

On May 29, the Department of Housing and Urban Development announced that qualifying buyers can apply the $8,000 tax credit toward the purchase of a home. To facilitate the process, the Federal Housing Administration is permitting its lenders to extend short term bridge loans, which will enable qualifying buyers to apply their tax credit toward closing costs, buying down their interest rate, or increasing their down payment above the FHA required 3.5 percent.

"With an abundance of inventory, reduced home prices, historically low interest rates and now the availability of the tax credit at closing, we expect to see the housing market further stabilize and improve," said Charles McMillan, president of the National Association of REALTORS.

* 2009 home buyers can claim a special tax credit worth up to $8,000. The American Recovery and Reinvestment Act offers qualifying home buyers a tax credit equal to 10 percent of a home's purchase price, up to a maximum of $8,000. The tax credit is offered to first time buyers, and those who have not owned a principle residence in the past three years. To be eligible for the tax credit, buyers must meet general income requirements and close on their purchase before December 1, 2009. Please contact us for more details on this once-in-a-lifetime program.