Homebuyers in The United States increased in April by 6.7 percent, the largest gain in almost 8 years. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 percent, and so the sales job continues. Things are better and these numbers prove it or so they would have you believe.
The media is jumping on the bandwagon in support of the Obama administration crediting the $8000.00 tax credit for first time homebuyers that was include in the stimulus bill signed by President Obama in February.
Lawrence Yun, The National Association of Realtors chief economist, cautioned that the pending sales data is more volatile than in the past because many sellers need banks to agree to take less than the original mortgage — a so-called “short sale.” That process is often difficult, time-consuming and can wind up falling apart before the deal closes.
So it would appear that we are supposed to believe that first time home buyers, those eligible for the tax credit, are scooping up all these deals from distressed banks and homeowners.
Perhaps a more likely scenario is a beginning bottoming out of the home market and that could be a positive, unless of course you are not a homebuyer , but a home seller.
Left in the wake of the “good news” is the fact that American homeowners are taking on huge losses through either selling their homes or losing them to foreclosure. The national median sales price in April plunged more than 15 percent to $170,200, from $201,300 in the same month last year. That was the second largest yearly price drop on record.
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