Sales of existing homes shot up in September, but are still below levels economists consider indicative of a healthy economy.
According to the National Association of Realtors, existing homes sold at an annual rate of 4.53 million in September. That’s an increase of 10 percent from August but down more than 19 percent from a year ago. August sales were revised downward slightly.
Comparing sales to a year ago is complicated by the federal tax credits for first time homebuyers that were in effect then and led to a surge in sales.
"This report is relatively goods news but the housing market situation has a long way to go before it fully recovers," said Chris Christopher, economist with IHS Global Insight.
Lawrence Yun, chief economist for the realtor group, agreed with this assesment and pointed to the on-going investigations of foreclosure proceedures as a possible factor in the recovery of the housing market.
“A housing recover is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium,” he said in a press release.
Foreclosures and housing finance are the focus of a two-day conference in Washington beginning Monday. Organized by the Federal Deposit Insurance Corporation and the Federal Reserve, the chairman of the Fed, Ben Bernanke, said that the bank is examining the foreclosure mess.
“We are looking intensively at the firms' policies, procedures, and internal controls related to foreclosures and seeking to determine whether systematic weaknesses are leading to improper foreclosures,” the chairman was expected to say in a written speech released by the Federal Reserve.
Bernanke said he expects preliminary results of the bank’s review in the new month.
The Federal Reserve also released a report detailing how the bank has tried to handle the foreclosure crisis to date.
According to the report from the realtors’ trade group, distressed homes -- those in foreclosure or sold through a short sale -- accounted for more than a third of all housing sales in September.
Nationwide, the median home price was $171,700 in September, 2.4 percent lower than a year ago.
In the New York City region that includes northern New Jersey and parts of Long Island, the median home price for an existing home was $382,600, three-tenths of a percent lower than a year ago. Compared to a year ago, sales were down nearly 20 percent in the area.
At the current national sales pace, there is more than a 10 month supply of homes for sale. Economists believe a six month supply represents a balanced housing market. With so many homes for sale, buyers have the upper hand.