According to the National Association of Realtors the force driving existing home sales today is first-time home owners eligible for the new $8,000 credit snapping up distressed homes and fix-uppers category.
First-time buyers accounted for more than half of all home sales in March, with activity concentrated in lower price ranges. But there is a troublesome side, because sales of foreclosed and other distressed homes tend to drag down overall home prices across the USA. These properties typically sell for 20% less than traditional homes.
CLICK HERE for a report on NE Tennessee's March existing home sales.
According to a report in USA Today, economists tracking the beleaguered housing market say these first-time home buyers represent a critical demographic that could help lead the industry out of its doldrums by buying up much of the excess inventory of homes that is drawing down home values nationwide. And in one promising sign, the inventory of unsold homes is starting to shrink. Total housing inventory at the end of March fell 1.6% to 3.74 million existing homes for sale, which represents a 9.8-month supply at the current sales pace, compared with a 9.7-month supply in February.
The hope among housing experts is that interest in millions of such properties across the nation will rise because of low interest rates, a tax credit for first-time home buyers of up to $8,000, and home prices that have sunk in some markets by more than 20%. Distressed homes are moving fast because they often sell below market value.
The $8,000 credit was approved by Congress and signed by President Obama earlier this year. Both of Tennessee's U.S. Senators and 1st District Rep. Phil Roe voted against the credit.
CLICK HERE for the full report.