SALES UP VALUES DOWN

I long for the day when the news headlines state "Home Sales are Up." That's it. But unfortunately everything comes with a "but, however, or although." Today's headlines for housing news states that new homes sales are up almost 3% in September; however they are down 33% from September of 2007. The increase of new homes sales may be a sign of a recovering housing market, although home prices were down another 9%. New home sales inventory was down, but there are still 394,000 new homes on the market (cnnmoney.com).

What the news headlines also fail to point out is why new home sales were likely up for September. New home builders and new home buyers alike have relied heavily on down payment assistance since the elimination of 100% financing mortgage options. A recent bill that was passed eliminated down payment assistance as of October 1st, 2008. There was in increase in volume of home purchases using down payment assistance in September as a result of the elimination of this program. Many homeowners still missed the deadline, losing their financing and their new home. Did this account for the increase in new home sales? We will likely find out when the numbers are reported for October.

It is always nice to see some encouraging news in the media regarding the housing market; although it would be far more encouraging to read simply "Home Sales are up!," or "Down Payment Assistant Reinstated!" It is unlikely you will get one without the other.