Posted by:Sarah Reilly
Existing home sales rose a surprising 5.1 percent last month (February). Over half of the homes purchased were however first-time home buyers who were looking to buy homes at cheap prices. This is good sign but industry cannot expect prices to increase(they are actually still decreases) or the percentage to increase too much more. It seems though that the market might have finally hit bottom and is on its way to leveling or maybe rising.
This just means that people are taking advantage of the low prices of homes on the market. First time buyers are taking advantage of the falling prices and lower mortgage rates make home ownership more affordable. The Median home prices fell to $165,400 in February from the same period a year ago which is about 15% less the last year.
This change has some at a pivotal point because the government is planning to help banks remove their bad assets and the economy is reflecting (jumps in the housing market, Wall Street, etc). The plan is to draw in private investors, including big hedge funds, to participate by offering billions of dollars in low-interest loans to finance the purchases. The government will share the risks if the assets fall further in price.