The housing market continues to struggle, propped up by existing-home sales but hamstrung by foreclosures and weak prices. The National Association of Realtors reported a 2.4 percent increase in sales of existing single family homes, townhouses, condos, and co-ops in May—the “first back-to-back monthly gain since September 2005.”
But existing-home sales were off 3.6 percent from May 2008 and were spurred by low mortgage rates (which proceeded to rise) and a shot in the arm from a first-time buyer tax credit. Meanwhile, sales of new one-family homes in May slipped 0.6 percent from April and 32.8 percent from May 2008.
And Local Market Monitor, which forecasts prices in 315 markets, shows stable or rising (by single digit) prices in 50 of those markets in 2010. “If you add up all the markets where we forecast a double-digit decline in home prices in the next year, they hold about 25 percent of the U.S. population,” notes Ingo Winzer, president of Local Market Monitor. “Consumers are running out of credit,” he says. “There is a lot of pain associated with foreclosures, and banks will continue to hurt.”