Posted on: September 26, 2012
The Wall Street Journal ‘Market Watch’ reports today in an article, “Sales of Existing Homes Surge in August,” that “sales of existing homes” across the United States “surged 7.8% in August”—a traditionally slow real-estate market period—to the “best level in more than a year.”
The National Association of Realtors said that “the level was the highest since May 2010” and that the “percentage gain was the strongest since August 2011.” Patrick Newport, a real-estate-forecasting expert and economist with IHS Insights, remarked that “those numbers were off the charts.”
Each of the United States’ four regions saw “monthly gains up to 8%.” Just as important as the robust and sudden sales percentage gains is the current pace of the market as one-third of these homes “were sold in a month.” The time it took to sell these homes fell to 70 days, “down from 92 days at the same time last year.” All of which suggests a return to healthy real-estate market conditions across the United States.
The Wall Street Journal explains that the market is “fueled by low interest rates and pent-up demand” and that “sales have improved considerably from their recession-era lows.” The article notes, however, that home sales are still “well below the 2005 peak of just over 7 million,” making investment in the United States real-estate market—particularly Florida’s—a very significant opportunity still.
“The housing market is recovering with great strength,” Lawrence Yun, chief economist at the National Association of Realtors observed. “Home sales,” he continued, “will be at a four-year high this year.”
In another significant article today, “U.S. Housing Starts Advance 2.3% in August,” the Wall Street Journal also reports that “the Federal Reserve’s decision last week to buy $40 billion in mortgage-related securities each month until the economy improves suggests better days ahead.” The increase in housing starts has a ripple effect on the entire economy. The data regarding increased housing starts from the United States Commerce Department is, according to the WSJ, “consistent with other indicators showing strength in the housing market.” The Federal Reserve’s $40 billion commitment to backstop mortgages certainly adds to the American real-estate market’s new lustre.
The combination of historically low interest rates, high demand, reasonable price gains, and increasingly low inventories, have all contributed to the recent surge in the American real-estate market, making it a worthy investment opportunity for Canadians.
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