The Case-Shiller Home Price Index shows prices up in 17 of 20 markets for the fourth straight month. The Case-Shiller Home Price Index is known in the industry to be one of the most conservative and some may even say the gloomiest of the major indexes. The index is clearly documenting month after month that the housing market not only has bottomed out earlier this year but is on a slow steady rise.

Home Prices

Now let's move to home sales. According to the National Association of Realtors, resale of existing homes increased sharply last month, up a dramatic 9.4% during September. Sales in September of 2009 were 9.2% higher than they were during September of 2008. We understand that this number has been pushed higher because of the first-time home buyers credit that's scheduled to expire at the end of November. There is some very positive movement in Congress looking to extending the credit into the first half of 2010. Once there's confirmation of the extension of the credit, and maybe even an expansion of the credit to existing home buyers, I'll pass the information along. But whatever the reason, people have gotten off the sidelines and are back in the market.

The good news doesn't end there; housing inventories fell just about everywhere. The average in September was an eight month supply of houses for sale, which is down from a nine month supply in August. We have a well-balanced market when there is a six to seven month supply of homes for sale. I'm sure that we'll see an increase in the inventory as the banks start to release some of their REO's.

Existing Home Inventory

But there's still more good news; mortgage rates are still averaging around 5% for a 30 year fixed mortgage and 4 ½% for a 15 year mortgage. This is a quote that just came out (11/4/09) regarding the Fed's stand on interest rates:
"The Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period."

Also out this week, according to Mortgage Bankers Associations National survey, applications for new purchase loans were up nearly 5% just last week.

And if that wasn't enough good news, the GDP (gross domestic product) often thought to be the measure of the nation's overall economic health, grew by 3.49% in the third quarter. Statistically this means the "great recession" we've been suffering through for the past two years has officially ended.

Current Economic Indicators

There's no denying that there's been a lot of positive news out in the last week.

But it wouldn't be accurate to say that it has all been good news. This is a very complex marketplace we find ourselves in and we can't deny that not all arrows point in an upward direction.

It's concerning that consumer confidence dropped for the second straight month according to the Conference Board, mainly predicated on fears of continuing job losses. Unemployment has a large effect on the housing market, so where is unemployment going? According to a recent survey by Wall Street Journal economists, they expect the unemployment rate to peak at around 10% in February of 2010.
If this prediction proves to be correct, then the majority of the job losses will have occurred, and their impact on housing is likely to be less of a factor.

There are a lot of wonderful opportunities out there to buy discounted real estate. If you've been sitting on the sidelines, now is the time to get in. Real Estate at these low prices and with these low interest rates may be the opportunity of a lifetime.