Positive Report on Home Sales, Prices

Though the housing industry started off the week on a gloomy note, today there is some encouraging national and Chicago real estate news.
Let’s begin with home sales. According to the National Association of REALTORS, the sale of existing homes throughout the country increased 7.7 percent in August from July and are 18.6 percent higher than sales posted during August 2010.
Even more encouraging: Existing-home sales in the Midwest rose 3.8 percent in August to a level of 1.09 million and are 26.7 percent above August 2010. The Northeast increase 2.7 percent; the South rose 5.4 percent and the West jumped 18.3 percent, as the entire country recorded positive results last month.
family in front of a home that sold. realtor with thumbs up.Total U.S. housing inventory at the end of August fell 3 percent to 3.58 million existing homes available for sale, which represents an 8.5-month supply at the current sales pace, a decrease from the 9.5-month supply recorded in July.
“All year, the relationship between home prices, mortgage interest rates and family income has been hovering at historic highs,” said NAR President Ron Phipps, “meaning the best housing affordability conditions in a generation.”
And while buyers and investors can appreciate those low home values, an increase in home prices marks a stabilization in the market. And, that’s where the Standard & Poor’s/Case-Shiller Home Price Index comes in.
According to the S&P, U.S. home prices increased 0.9 percent from June to July, and 17 of the 20 largest metropolitan areas posted positive monthly increases.
The Chicago area beat that, with home prices increasing 1.9 percent in July.
That is the fourth straight month-over-month gain both nationally and locally.
If you are a Chicago home buyer, don’t worry: Chicago-area home prices are still 6.6 percent lower than they were during the same month last year. In fact, home values are hovering at levels seen close to a decade ago.
Nationally, home prices are down 3.7 percent from 2010, but that’s better than the 4.5 percent expected by analysts.
“With July’s data we are seeing not only anticipated monthly increases, but some fairly broad improvement in the annual rates of change in home prices,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices.
“While we have now seen four consecutive months of generally increasing prices, we do know that we are still far from a sustained recovery. Continued increases in home prices through the end of the year and better annual results must materialize before we can confirm a housing market recovery.”