What some expected to be a spring fling for the U.S. housing market turned into a white-hot summer.
The typical spring fling for the U.S. housing market is turning into a hotter summer, as home buyers return to the market with help from foreclosures, tax incentives and abundant supply.
Home buying and sales activity typically pick up in the spring as warmer weather boosts activity, but the momentum has continued into the summer, which some take as a sign of long-awaited stabilization in the hard-hit sector.
Improvement in this market bodes well for the U.S. economy, as it points to better demand in the sector where the first signs of the recession took root.
“Seasonality no doubt helped improve housing sales in the spring, but I still think the worst is behind us,” said Jeffrey Fisher, professor of real estate and director of the Benecki Center for Real Estate Studies at the Indiana University Kelley School of Business.
Low mortgage rates, high affordability, and the government’s $8,000 tax credit for first-time home buyers have helped stabilize the market. Fisher said he does not expect further significant price declines, which should boost consumer willingness to purchase homes.
But with the tax credit set to expire in several months and distressed properties making up a high proportion of sales, the recent flurry of activity masks uncertainty about the long-term outlook.
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