Low Home Prices and Mortgage Rates Spur Existing Home Sales for 3rd Straight Month

The National Association of Realtors announced today that existing home sales in October surged more than 10 percent when compared to September 2009. This also represents a 23.5 percent improvement over the same period a year ago. 

The report also showed that unsold home inventories dropped to a seven month supply, and are now nearing more normal levels.

According to Bob Walters, Quicken Loans’ Chief Economist, home sales should stay consistent as long as today’s low rates remain.

“There is plenty to give thanks for in the latest existing home sales report,” Walters said.  “It is becoming apparent that the first-time homebuyer tax credit is having a noticeable impact on home sales, which in return is also driving unsold home inventories lower.  As long as rates remain at their current lows, I would expect to see this strong activity persist, especially with the extension and expansion of the homebuyer tax credit program.”

Earlier this month, Congress passed an expanded homebuyer tax credit program, which provides as much as $8,000 for consumers purchasing a home for the first time, or who have not owned a home for the previous three years.  The program now also includes a provision providing up to $6,500 for move-up buyers.

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Did Low Home Prices and Mortgage Rates Spur Existing Home Sales for 3rd Straight Month Deliver on the Promise?
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