Existing Home Sales Increase

The National Association of Realtors announced recently that existing home sales in April increased 2.9 percent as compared to March 2009. While home sales were up, the inventory of unsold homes also rose 8.8 percent to 3.97 million units, representing a 10.2 month supply.

April’s improvement in existing home sales would seem to be a positive sign and shows that consumers are taking advantage of the incredible value available in today’s housing market, especially when paired with the $8,000 first-time homebuyer tax credit.

However, even as sales rose, so did the inventory of unsold homes. This is a much more important indicator of any potential housing recovery, and the increase in homes hitting the market does not bode well. Many economists feel there cannot be any true talk of a housing correction until we see unsold inventories in the 5-month range.