Existing Home Sales Down: “Blip” or New Trend?by Tim Manni
After four months of increases, the National Association of Realtors (NAR) reports today that Existing Home Sales were down 2.7% in August. Dawn Wotapka of the Wall Street Journal begs the question: is this merely a “blip” in a monthly statistic or a developing trend? Should this be a growing concern for the real estate industry?
Is the home-sales honeymoon over already even though the first-time homebuyer tax credit hasn’t even expired yet?
Some say that buyers looking to tap the tax credit have already acted, and there’s little urgency for those who don’t qualify to buy immediately because of income restrictions or they already own a home.
The uncertainty of whether or not Congress will extend the tax credit could be creating “borrower limbo.” Repeated warnings from those in the housing industry (including us), that “Time Is Running Out for the $8,000 Tax Credit” could have caused some borrowers to simply give up or wait for a possible extension.
“It’s likely that some demand was moved forward into the spring and summer months causing the earlier increases,” said HSH VP Keith Gumbinger. “Given the state of the job market, only so much immediate action can be taken by wanna-be homebuyers due to strict underwriting.”