- MENU
- HOME
- SEARCH
- WORLD
- MAIN
- AFRICA
- ASIA
- BALKANS
- EUROPE
- LATIN AMERICA
- MIDDLE EAST
- United Kingdom
- United States
- Argentina
- Australia
- Austria
- Benelux
- Brazil
- Canada
- China
- France
- Germany
- Greece
- Hungary
- India
- Indonesia
- Ireland
- Israel
- Italy
- Japan
- Korea
- Mexico
- New Zealand
- Pakistan
- Philippines
- Poland
- Russia
- South Africa
- Spain
- Taiwan
- Turkey
- USA
- BUSINESS
- WEALTH
- STOCKS
- TECH
- HEALTH
- LIFESTYLE
- ENTERTAINMENT
- SPORTS
- RSS
- iHaveNet.com
Luke Mullins
Although home sales increased more than expected in April, real estate experts are expressing concern that the market may face renewed downward pressure in the second half of the year.
The optimistic looking data reflects a number of favorable conditions in today's market. Home prices have fallen precipitously from the peaks reached during the housing boom, helping restore affordability to many markets. Rates on 30-year fixed mortgages remained in an attractive range in April, averaging just above 5 percent for the month. Meanwhile, recent government data suggests that the labor market may finally be recovering from a protracted period of job losses.
Much of the improvement is rooted in the looming expiration of Uncle Sam's home buyer tax credit, which offers qualified buyers up to $8,000 in incentives as long as they have a sales contract signed by
Many economists, however, expect sales to slow once the tax credit expires. That's because the credit likely helped pull forward sales that would have taken place in later months, with buyers scrambling to take advantage of the government incentives.
The market's recent price gains could soon reverse course as well. The backlog of unsold homes increased in April, with the months' supply of unsold inventory hitting 8.4, up from 8.1 in March. (These figures are not seasonally adjusted.) Ian Shepherdson, an economist at
For his part, Patrick Newport, an economist at IHS Global Insight, says the tax credit's expiration will lead to a "mid-year plunge" in home sales. "Our view is that sales will start growing sustainably as the job market improves."
So while lower prices, cheap mortgage rates, and government tax incentives have created some compelling reasons to jump into the real estate market today, Mike Larson of