It seems the battered US housing market has regained a sense of normality, edging more closely towards a buoyant outlook in the near future. There is an apparent bump-up in home sales for the month of April, making a crack in the ongoing low-sales trend over the last months.
Data corresponding to April presented something that fills the vacuum of uncertainty with hope. According to the National Association of Realtors report, sales of existing homes rose 4.6 percent in April. This creates an annualized rate of 3.4 million units, following a fall in February and March.
Paul Diggle, a property Economist of Capital Economics, said ‘The rise in existing home sales in April suggests that the modest recovery in the housing market is back on track.’
April home sales figures weren’t high enough to surpass sales spikes recorded when the first time home-buyer credit program was in operation; nevertheless, it is a healthy sign indicating a chance of the housing market gaining momentum. Sales of existing homes increased in all regions with the North-east recording 5.1 percent growth, the West a 4.4 percent growth and the South a 3.5 percent growth.
An economist surveyed by the Dow Jones Newswires had predicted that home sales would rise by 2.7 percent on a monthly basis from previously reported March figures.
Steven Ricchiuto, Chief Economist at Mizuho Securities USA, Inc., said ‘the increasing pace of sales had pulled more homes on the market and many of these are higher-priced homes that had not been selling.’
Distressed properties make up 28 percent of the total sales of existing homes, a clear fall of almost 10 percent on the year over year (YOY) basis, and a percent lower than the March 2012 sales of 29 percent.
The ailing housing market was greatly responsible for crafting the recession during 2007 and 2008; it sparked bits of deadly fire, which eventually engulfed the US economy. Joel Naroff, chief economist at Naroff Economic Advisors, said ‘as pick up, we should start seeing better levels of starts and that would mean more construction jobs.’
Jeremy Lawson, a Senior Economist at BNP Paribas in New York, said, ‘Even though we have seen home prices start to turn, our concern is that in the second half of the year as more foreclosures come into market, we could see a dip in prices.’
Strands of thought may differ because of underlying analogy and exercise of logic between two different people, but the bottom-line is clear. There is some positive activity in the housing market that may continue in near future.