Last week, the National Association of Realtors (NAR) released several statistics that suggest a possible uptick in real estate sales activity. First, the Pending Home Sales Index showed a 2.1 percent increase, based on contracts signed in February. In the Northeast, the increase was close to 11 percent.In addition, NAR’s Housing Affordability Index rose to a record high, indicating the most favorable relationship between home prices, mortgage rates and family income since tracking began in 1970. Improved affordability combined with stimulus incentives like the $8,000 tax credit for first-time buyers, means the buying power of a typical family has never been better.
Lawrence Yun, NAR chief economist, expects “home sales to gain momentum in the second half of the year with first-time buyers absorbing a lot of the excess inventory. Under these conditions, we should see price stabilization in most markets by the end of the year.”