Data suggests more Americans in market for a mortgage loan

09.26.09
By Lewis Greene

The real estate industry got some mixed news this week in the form of new statistics for existing home sales.

The latest figures from the National Association of Realtors found that existing home sales were down 2.7 percent in August, with 5.1 million units having been sold. In contrast, 5.24 million were sold in July.

Despite what was widely seen as an unexpected downturn, the industry may still have some reason for optimism. That's because the figures were still 3.4 percent higher than the 4.93 million units sold in August 2008. The NAR also noted that home sales are up 15.2 percent in the past four months.

One frequently cited factor in the renewed real estate strength is the government's $8,000 tax credit for first time home-buyers. This may be especially beneficial when considering the NAR's point that 30 percent of last month's sales involved first-time buyers.

With that in mind, the organization and others in the real estate industry have been urging Congress to renew the tax credit instead of allowing it to expire later this year. If the credit does expire, they maintain, the industry could suffer a serious setback just as it is beginning to see signs of life.

Elsewhere, a Bloomberg News report quoted Mark Bronzo of Security Global Investors as saying that "the housing data disappointed and investors will be looking for signs that the Fed will pull back a bit on the stimulus." With that in mind, he warned of a possible stock market sell-off in the coming weeks.

More Americans are apparently shopping for a mortgage loan in light of falling prices and renewed confidence in the economy, but credit standards are still tight and it remains to be seen if this will prove to be a drag on the industry in the longer term.

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Homebuyers are more active than they were last year, but the latest sales figures were somewhat disappointing.