Experts: Don’t read too deep into February’s existing home sales

[William Hull]

Sales of existing homes were down in February but this not a sign if a downward trend. New construction that will improve the low inventory of available houses as well as increased consumer confidence will improve home sales in future months. Home sales have continued to increase since the 2010 recession and a new group of buyers, millennials are looking to purchase homes and are adding to the market. The dip for the month is still higher for last year at this time. An improved job market along with the psychology involved with consumer confidence will keep the home sales market viable and continually improving. Some experts however, do not agree with this analysis. They argue that despite a strong labor market and a public desire to purchase homes, sales may not improve because there are not enough houses available for sale right now. Available buyers can't find the houses that they want or pricing if houses are too high. Shortages in inventory appear to be affecting the most affordable homes. Homes under 100k have experienced the greatest decline in sales. Sellers are reluctant to sell their homes if they can't be sure that they can find an acceptable new home to purchase. Rising mortgage rates are affecting the market as well.

Key Takeaways:

• Existing home sales have been improving since about 2011 alongside with the economic recovery.
• There were a couple of dips along the way, the latest in February. However, experts don't read much into this.
• Along with increased consumer demands experts are starting to see inventory shortages especially with the more affordable homes.

"Experts predicted the combination of pent-up housing demand and historically high consumer confidence will increase existing home sales in the months ahead."

Read more: http://www.housingwire.com/articles/39645-experts-dont-read-too-deep-into-februarys-existing-home-sales-drop