Home sales increased at the start of the second quarter of 2008. In May, sales of existing homes jumped somewhat more than anticipated. The rise in home sales was the result of low home prices coupled with low mortgage rates.
The existing homes sold rose in May by 2% to an adjusted annual rate of 4.99 million units up from 4.89 million in April, according to the National Association of Realtors (NAR). The home prices have been declining since the recent housing bubble bust. During the residential real estate boom, home prices had leapfrogged into the stratosphere, only now are they coming down to reasonably realistic levels.
The level of the national median existing home prices fell 6.3% to $208,600 from $222,700 the same time last year. Up until recently many home buyers were on the sidelines waiting for prices to drop further. They got their wish
Presently, home prices are affordable, even working families and the middle class can afford to get a home. But it seems that home prices may drop further, enabling even more Americans to afford their homes. The oversupply of new homes, existing homes, and foreclosures on the market favors home buying. It may be until the year 2010 until home buying market stabilizes further.
Buyers are mainly concerned about two things when deciding on whether to start their house hunting endeavor: (1) the prices of homes in the local area and (2) the mortgage rates. In the current environment these two important criteria are being met.
The housing and home loan arenas have seen readjustments in the past several months. The overabundance of home choices foreclosures, new homes, and pre-existing home has given home buyers unparalleled choices at extremely low prices.
Home buyers must use their position of power to leverage maximum concessions in prices amongst other things from homebuilders and home sellers.
It seems the next 2-3 years will provide great opportunities for home buying as supply will outstrip demand. As such, it is the perfect opportunity with the low home loan interest rates to do a mortgage refinance or purchase a home.