National Home Sales Data a Hopeful Sign

November 23, 2009

Data released November 23 by the National Association of Realtors reveals good news for the nation’s sluggish real estate market.

Actual home sales in October far outpaced analysts’ projections for the month, and showed a whopping 10.1 percent increase over September. The increase translates to a seasonally adjusted national annual sales rate of 6.1 million homes.

The October data also shows homes sales at their highest level in 2½ years. The increase was helped in part by many first-time homebuyers who were hurrying to take advantage of an $8,000 tax credit set to expire on November 30, but which has now been extended until April 30, 2010 (see related story).

Industry analysts are forecasting that housing prices may fall another 5 to 10 percent as foreclosures continue to affect supply. The states of Florida, Nevada, California and Arizona account for 43 percent of new foreclosures.

Nonetheless, the number of unsold homes appears to be on the decrease. In October, housing inventory was reduced to about a seven-month supply, closer to the ideal inventory stock of about six months.