New numbers from the National Association of Realtors seem to suggest that the US real estate market has turned the corner. Sales of homes and condos for April 2010 were 22.8% higher than for the same period last year while median prices rose in almost 60% of US metropolitan markets. Lawrence Yun, the frequently optimistic chief economist for the NAR said, "The housing price correction appears essentially over."
While admitting that April's strong numbers were likely influenced by an expiring $8000 Federal tax credit and acknowledging that "there will be some fallback" in the next few months, Yun cited near record low interest rates (around 5% for a 30 year fixed rate loan), growing buyer confidence and an improving economy in calling for a turnaround.
To counter the expiring Federal credit, California is offering $200 million in tax credits to first time buyers or buyers of new homes. The credit, up to $10,000 or 5% of the purchase price whichever is less, only apply to purchases of principal residences. Qualifying properties include condos, mobile homes, and single family residences but not homes constructed by taxpayers.
Still, mortgage delinquency rates continue to weigh on real estate price gains. Figures released by the Mortgage Bankers Association last week show that the number of delinquent mortgages across the country has not declined much in the last year. This could portend a steady stream of foreclosures.
In a news release the MBA's chief economist, Jay Brinkmann, offered tepid encouragement,"If mortgage delinquencies are not yet clearly improving, it also appears they are not getting worse." On the up side according to Brinkman, California's mortgage picture, once among the bleakest, is now getting brighter.
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