Housing Market Discounts

February saw a sharp decline in the sales of previously owned homes, which opens the way for discounts this spring.

The median price for homes hit its lowest point in almost a decade at $156,100. This is coupled with a drop in home sales of almost 10%, according to a realtors report.

The forecast is for a busy real-estate season spurred on by discount home prices along with low interest rates, which should encourage undecided buyers to commit.

Positive developments in the job market are giving people more confidence in their ability for sustained income earning. In turn, this confidence encourages home buying. Other factors may include those who've agreed to share a home because of employment and financial concerns but who are now able to afford their own place.

Although signs are encouraging, it's important to understand that the housing market is yet a few years away from significant recovery, according to economists.

Further confirmation that market has a ways to go is the fact that some new home builders are raising broker commissions and increasing residential discounts. This indicates a sense of desperation on the part of builders which will only escalate in over the next two months (busy season).

February's lull may be the result of poor weather, canceled deals, and distress sales. Investor transactions amounted to nineteen percent of February sales, a decrease of four percent from January. Low prices also find sellers capitulating and reducing their asking prices.

According to economists, the distressed sales will trend upward and continue to challenge prices. Mortgage rates, on the other hand, which were already on the rise through the fall and winter, have been declining over the last few weeks resulting from the unrest over the Japanese crises.

Most feel that mortgage rates will rise above the five percent for 30-year loans that it reached last week. Buyers are looking to pounce on the opportunity.