The recovery in the housing market continues to gain momentum. Sales for existing homes were up at 5.9 percent in November. This was in spite of the destruction wreaked by Superstorm Sandy on the East Coast.
The final numbers were higher than expected, considering that this is not the time of year when most people think of buying homes. The anticipated number was 4.9 million, which was easily surpassed. This is the highest since November 2009 and was even up over October in spite of the fact that most experts make adjustments this time of the year.
Prices also Increase
The median price also increased to $180,600, which implies that home values are on the rise as foreclosure numbers continue to drop. Sales increased from October in the area most affected by Sandy. The Midwest also had good numbers, along with the south. The West did the worst, with just a small gain of 0.8 percent.
These improvements have been attributed to a better job market. These two areas often influence each other, with an improvement in the housing market helping people get jobs. As more people get jobs again, they become interested in home buying.
The Factors for the Increase
Three factors are considered responsible for the improvement in home sales. The first is low prices, as the cost of buying a home is still way below what it was before the crisis. Low mortgage rates also contribute to the increase in sales, along with job gains. Not only are the existing home sales up, but more homes are being built.
The improvement in the economy not only encourages more Americans to buy homes, but it helps to keep homeowners in the homes they are paying for by allowing them to keep up with their payments. Bank foreclosures have fallen to their lowest in over five years, which is good news for homeowners, banks, and the economy in general.
Sales of distressed properties, including foreclosed homes, were at their lowest at 22 percent for the month of November. This is a great boost for home sales, because the sale of these properties is usually around 20 percent less than the market value. As these sales decline, it helps to boost the price of other homes.
Another issue that helped sales was the drop in short sales. A short sale is where a homeowner who is in foreclosure is able to sell the property for less than its value. It was expected that these sales would increase before the end of the year due to possible changes in taxes after December 31st. Since they were below what was expected, that was good news for the rest of the houses on the market.
Every month continues with good news for the housing market. The steady increase in sales and prices is a good indication that the recovery will continue, even if it is at a slow and steady pace. While it is far from the numbers during the housing boom, it is a positive indication of the recovery.