US house sales increase

Following record foreclosure rates in the US in the aftermath of the sub prime mortgage
crisis, home purchases of existing homes increased by 5.5 percent last month.

Due to the high foreclosure rate, prices have declined and this has aided the stabilisation of the market despite the crisis in the financial markets.

Foreclosed homes accounted for 35 and 40 per cent of September’s total of house sales, although the most important effect is the fall in prices.

Analysts have predicted that the number of sales will steadily increase and that is an opinion that is backed by the National Association of Realtors.

Earlier this month the Federal Reserve Chairman, Ben Bernanke, said that the only real stumbling block that remains is the accessibility of mortgages as even households with a good credit rating are struggling to be awarded credit.

Re-sales are often seen as a good measure of the overall stability and health of the housing market as they represent 90 percent of home sales and with the struggling construction industry, new builds are currently on the back burner.

The turnaround in sales began in California a few months ago and has now spread to Colorado, Kansas, Minnesota, Missouri and Rhode Island.

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