Analysis: U.S. Home Sales Rose 7.7% in August

BY ANLI XIAO

ANCHOR JIM FLINK


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According to the National Association of Realtors, or NAR, existing home sales have finally bounced up. Here's Bloomberg:

MICHAEL MCKEE, BLOOMBERG: "Stories never fit neatly in the way we project them. In this case, housing much better last month than analysts expected. We are looking for a slight re-bound of 1.7 percent, instead existing-home sales rose 7.7 percent for a just over 5 million annual rate."

Analysts say it's good news, since housing sales have fallen in four of the past five years.
But how did it happen? NAR chief economist Lawrence Yun (yoon) says it's the result of previous closings finally coming through-- among other things.

"Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations... Investors were more active in absorbing foreclosed properties. In additional to bargain hunting, some investors are in the market to hedge against higher inflation."

So are the numbers the first sign of a real estate recovery? The Houston Chronicle says-- maybe. The chairman for Houston Association of Realtors tells the Chronicle...

"Recent increases, however, are at least partly the result of lingering effects from last year's tax credit. Strong sales early in 2010 tapered off considerably during the third quarter after the government incentive expired ... That's been skewing year-over-year comparisons."

But others have a more negative outlook. The LA Times notes-- the reason prices went up, isn't exactly good news for everyone.

"...sales were driven by an increase in foreclosures, a sign that home prices could fall further next year and slow a housing recovery... Most economists say home prices will keep falling, by at least 5 percent, through the rest of the year. Many forecasts don't anticipate a rebound in prices until at least 2013."

But the NAR president tells CNNMoney-- it isn't that there aren't any eager buyers, it's that lenders are rolling back.

"'The biggest factors keeping home sales from a healthy recovery are mortgages being denied to creditworthy buyers, and appraised valuations below the negotiated price.'"

Finally, economist Brian Jones tells Bloomberg-- there's still hope.

"Housing's been down for so long, we should take whatever good news we can get... Interest rates are low and pricing is attractive and people are responding."



Transcript by Newsy.

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News & Politics

Tags:

• us home prices
• home sales
• new home sales
• existing home sales
• pending home sales
• us new home sales
• business news
• economy