Photo Credit: activerain.com/blogs/bpuckett
According to a press release from the National Association of Realtors, in five of the last six months, sales of existing homes have increased. Currently, existing home sales are at a seasonally adjusted annual rate of 5.57 million units. In addition, there was a 9.4% increase in existing homes sales from August ’09 – September ’09 and sales activity is at its highest level in more than two years. The same press release stated that there is a 7.8 month supply of homes on the market and that a seven month supply indicates that market prices are stabilizing.
According to monthly press releases issued by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, new home sales have increased every month since March, and the supply of new homes has steadily decreased. In August, there was a 7.3 month supply of new homes on the market, down an impressive 6-months from January’s high of 13.3 months.
Many in the industry attribute the increase in sales and the subsequent decrease in inventory to an $8,000 tax credit for first-time home buyers, and they fear that if the credit ends, the market won’t have as strong as a recovery. I certainly agree that the recent large increases are because the tax credit is about to expire, but, in my opinion, interest rates, confidence and affordability have played a much larger role throughout the year. I think we can have a strong recovery by giving credit where credit is due.
In the press release mentioned above, the NAR cites one study that showed first-time home buyers accounted for more than 45% of all home sales in 2009. In 2008, they reported that first-time home buyers accounted for 41% of all homes sales, 39% in 2007 and 36% in 2006.
The 4% increase from 2008 – 2009 is a nice increase, but I’d bet that much of the increase comes from the decrease in home prices, high percentage of distressed property sales and low interest rates? It looks like the number of first-time home buyers has increased each year as home prices have decreased and affordability has returned. Over the last four years, the percentage of first-time home buyers has increased by an average 2.75% each year.
Regardless of what it’s from, the increase in new home sales is refreshing and encouraging. It shows that people are buying homes and that confidence in the real estate market is returning. More than anything, it shows that a majority of home sales are coming from true demand.
The constant onslaught of good news over the past few months has undoubtedly increased buyer confidence and has helped some buyers decide to buy a new home; hopefully, the good news continues.
Cheers to an increase in sales 
Sources:
Big Rebound in Existing-Home Sales Shows First-Time Buyer Momentum – NAR
Housing Sales Historic Press Releases – Cenus.gov
I am a Managing Partner, Internet Marketer and Blogger at New Homes Section. Follow me on 
In my humble opinion I dont think that the tax credit is responsible for the recent spurt of market activity. Although it is a great bonus and incentive, restored buyer confidence and an expected increase in market prices is spurring people to buy now.
This is definitely a welcome sign and yes people should be confident enough to invest in properties. The numbers increase depicts a different story whereas the fall in price level depicts a different story. Just like life this niche also has tons of twists and turns. I wish all of us play safe.
.-= Mack@Las Vegas Real Estate´s last blog ..Commercial Real Estate Bubble =-.
I have noticed this week a lot of my internet activity has declined on my websites, which usually is the first sign of a slow down for my market. I think the credit was a huge help in boosting sells, and now that it is about to expire, I can see the sales dipping all over the country.
We haven’t seen a substantial drop in demand for homes in San Diego, even with the imminent expiration of the tax credit. But then again, the Senate approved extending the $8,000 tax credit until April, and the House is likely to follow. Perhaps people now expect the extension.
.-= San Diego Homes´s last blog ..San Diego Realtors At Miramar =-.
I know the credit got extended, but I wonder if we are going to see a “hangover” similar to what the auto industry saw. I think we have pulled all the buyers out the wood work and could face a stark winter for home sales.
Utah experiences ups and downs these days which makes home buyers a little more dubious when it comes to deciding to buy homes or not. Real estate market is truly unpredictable, the best thing to do is just wait and see what will happen next.
This is a great sign that the economy is slowly but surely coming back…as it definitely will. We live in a cyclical world and the cycle is about to come around in our favor!
.-= Richard@How To Videos´s last blog ..How To Resize Pictures =-.