Sales of Existing U.S. Homes Rise

As reported by Bloomberg.com - "Sales of Existing U.S. Homes Probably Climbed as Prices Fell":

Sales of existing U.S. homes probably climbed in July to the highest level in 10 months, signaling the housing crisis that crippled the world's largest economy is easing, economists said before a report today.

Purchases rose 2.1 percent to a 5 million annual rate, according to the median forecast of 64 economists in a Bloomberg News survey. It would be the fourth consecutive gain, capping the longest stretch of increases since 2004.

As noted in our previous post, "Housing Affordability", many factors are contributing to the immediate changing housing conditions:

Foreclosure-driven declines in prices, government credits for first-time buyers and near-record-low borrowing costs may keep stoking demand, helping the economy recover from the worst recession since the 1930s. Ongoing job losses are a reminder that more Americans will probably lose their homes, indicating a rebound will be slow to take hold.

'We've begun a recovery in home sales,' said Ellen Zentner, senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. 'This is the best time to buy a house if you can qualify for credit. We expect to see continued, but gradual, improvement.'

Do you think this trend of stabilizing home sales and prices will continue or is this just a minor positive blip in a gloomy housing future still to come?

Housing Affordability

As reported by CNNMoney.com - "Homes still affordable - really affordable":

Homes continue to be more affordable than they have been in nearly two decades.

The typical American family, making the nation's median income of $64,000 a year, could afford to buy 72.3% of all homes sold in the United States during the second quarter, according a quarterly report from the National Association of Home Builders (NAHB) and Wells Fargo (WFC, Fortune 500).

That's off just a tad from the record 72.5% reached during the first three months of 2009, but up substantially from the second quarter of 2008 when only 55% of homes sold were affordable.

The measure of housing affordability was calculated as follows:

The NAHB judges a home to be affordable if a family making the metro area's median income could devote no more than 28% of their take-home pay toward housing costs.

Dramatically lower housing prices, Federal / local housing incentives and home buyer credits, and historically low interest rates have made a huge dent in housing affordability.

Are you buying?