Some Good News on Previously Owned Homes Sales

Sales of previously owned homes rose more than expected in April, though the pace of sales remains below year ago levels.

The National Association of Realtors says existing home sales rose 2.9 percent from March to an annual pace of 4.68 million units. The biggest jump in sales last month was the market for condos and coops, up 6.4 percent from March.

"Most of the sales are taking place in lower price ranges and activity is beginning to pick up in the midprice ranges, but high-end home sales remain sluggish," said NAR chief economist Lawrence Yun. "The Federal Reserve needs to help restore liquidity for the jumbo mortgage market by buying these loans under the TALF program."

The number of first time buyers declined to 40 percent in April, a sign that NAR says indicates more repeat buyers are getting back into the market. And the number of people actively looking for a home to buy is up 14 percent from a year ago.

Foreclosure sales get some of the credit for the increase in existing sales. But so do other factors working in favor of the housing market.

Mortgage rates remain historically low, with the average rate on a 30 year fixed-rate mortgage below 5 percent for 10 straight weeks, according to Freddie Mac (NYSE: FRE).

The NAR also believes the $8,000 first-time homebuyer tax credit will lift sales this spring.

Even so, there are a lot of homes for sale out there. NAR figures show the number of existing home currently on the market nationwide rose 8.8 percent in April to 3.97 million. That represents a 10.2 month supply, NAR says.

Source: National Association of Realtors