Tuesday, May 11, 2010

House Prices Rebounded Last Quarter in Hardest hit Housing Markets

By Mark J. Donovan

The housing market continues to show small signs of improvement according to the National Association of Realtors (NAR). Housing prices actually increased in the past 3 months in 91 cities across the United States. Hardest hit communities saw home sale prices increase dramatically. Saginaw, Michigan, for example, saw home sale prices double over the past quarter to an average sale price of $60,800. Nationally, the average home sale price actually dropped 0.7%. Though it was a drop, it was a dramatically reduced drop than previous quarters in recent years. Since 2006, home prices have fallen near 30%, so any sign of stabilizing home sale prices, even reported as a small drop, is a positive step towards a recovering housing market.

If the economy continues to show improvement, and unemployment inches down even just a little, 2010 could represent the first positive annual growth in national home sale prices since 2006. The only other unknown variable is the expiration of the home purchase tax credit which expired on May 1st. The home purchase tax credit has helped to mitigate falling home sale prices over the past year or so, and with the expiration of it, there is the risk that the housing market could stagnate or even falter again if the economic and unemployment picture do not improve.

No comments: