After surging 10% in October, sales of existing homes were up again in November, growing 7.4% according to the National Association of Realtors. Many feel, including NAR chief economist Lawrence Yun, that this uptick in sales was the result of the rush of first-time home buyers to take advantage of the government tax credit.
As you may know, November was originally going to be the last month first-time home buyers could qualify for the federal tax credit. An estimated 51% of November 2009 closed sales were by newcomers to the market according to a NAR survey. Lower mortgage rates also contributed to November’s increase (the average fixed rate loan was 4.88% according to CNNMoney.com).
Many in the industry feel that December will be slower. One reason for this was the rush to close transactions by the end of November, which effectively stole sales from December. However, NAR feels that sales will continue to be steady because many Buyers who had been sitting on the fence now feel that the market is at or near the bottom.
As always, the market will determine where values go next…