The housing market continues to stabilize as existing home sales increased to a seasonally adjusted value of 4.68 million or 5.6 percent, according to the National Association of Realtors. The figures are a positive development compared to the figures for existing home sales dropped by 2.2 percent in October.
According to the association, about 4.7 million worth of condominium and existing home sales are recorded for the month of November 2010, but the figures are 27.9% lower for the same month in 2009, where home buyers are rushing to acquire homes to secure federal tax credit.
However, about 33 percent of existing home sales in November are said to be distressed sales, which include short sales and foreclosures where banks agreed to sell homes for less than the amount or value of its mortgages.
According to Freddie Mac data mentioned in the report, mortgage rates have stirred into a higher level lately, though mortgage rates are still at an all-time low of 4.30 percent.
Increasing mortgage rates do not usually deter housing activity and existing home sales, according to economists from Bank of America in a note to clients, because rising rates are naturally a signal of a developing economic situation.
Several US economists expects the U.S housing markets will stay constrained by the poor economy and scaled-back bank lending, which dampens potential home buyers.
National Association of Realtors’ chief economist, Lawrence Yun said the current existing home sales are back to the level where federal tax credit existed, but said the figures are not going to be “sustainable” until the year 2000 rates of over 5 million is achieved.