In a sign that the market could be stabilising and buyers are on the way back, sales of US homes rose in April.
The National Association of Realtors said total sales jumped 2.9% from March to April, reaching an annual rate of 4.68m. The jump coincides with the traditional US spring buying season. The sales were still 3.5% below the 4.85m housing unit level in April 2008, however.
"Most of the sales are taking place in lower price ranges and activity is beginning to pick up in the mid-price ranges, but high-end home sales remain sluggish," said NAR chief economist Lawrence Yun.
Because foreclosed properties will likely be released into the market over the rest of year, it is critical that distressed homes be quickly cleared from the market, he said.
"Fortunately, home buyers are being attracted to deeply discounted prices and are bidding up many foreclosed listings, particularly in California, Nevada, and Florida - this will set the stage for healthy market conditions going forward," Yun said.
For now, house prices have keep sinking. The S&P Case-Schiller home price index showed there was an 18.7% decline in March from the same period a year ago. Prices in the first quarter of 2009 fell 19.1%, the steepest decline on record.
A Wall Street Journal article by Brett Arends used the latest index figures to calculate houses in America have produced real returns (considering inflation) in capital value of just 1.15% per annum since 1987, when the Case-Schiller Index of 10 major US cities began.