Existing Home Sales Report Helps First Time Home Buyers

This winter has yielded reports that make it appear that home sales have slowed down, but it could be exactly the type of information that helps first time home buyers.

The headlines show a 17% drop in Existing Home Sales in December followed by another 7% in January.  “Existing homes” are those resold by a prior owner, basically those that are not new construction.

The New Home Sales data last week from the government was similar and that report put new home sales at a 40-year low and showed new homes supplies higher by an entire month.

This month’s Existing Home Sales report yielded a number of seemingly ominous headlines:

1. Sales volume is at its lowest levels since June 2009
2. Sales volume fell below its 12-month rolling average
3. Home supplies are at a 5-month high

The housing recovery hasn’t stopped, but it makes for great headlines.  Sales are cyclical and this isn’t a normal market.  The original (actually second) first time home buyer tax credit ended in November, pulling some of the normal buyers from December and January and accelerating them into October and November.

If you look at the averages over a few month period, home sales are doing just fine.  The only thing that has changed is that the headlines have helped to make today’s first time home buyer have a little extra leverage in negotiations….something that is just fine if you’re looking to take advantage of today’s home prices.