A Real Estate Trade Group has reported that sales of existing homes have risen by the largest margin following a five year slump. According to the National Association of Realtors the last two months, August and September, have shown an increase in number of existing home sales, which has not been seen since the July 2003 real estate boom. Reports have shown that this may be the glimmer of hope that the economy has been waiting for. The rise in September sales pushed real estate activity to a whopping 5.18 million units, dropping the percent of unsold homes by 1.6 percent in September.
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Chief economist for the Realtors, Lawrence Yun, has stated that a sales turnaround was first seen in California and broadened out from there. This makes it seem as though the housing market may be stabilizing, but the turnaround could stop because of a possible recession. The entire country has continued to suffer from the real estate market bottoming out especially the Northeast, which has suffered its worst downfall with a decline of 1.1 percent in overall home sales. Whereas in the West, the market is beginning to show improvement with sales soaring to 16.8 percent, along with the Midwest showing a moderate increase of 4.4 percent , and a 2.2 percent in the South.
Sheila Bair, the head of the Federal Deposit Insurance Corp., is pushing The Treasury Department to include in the $700 billion rescue package for the financial system a new program to prevent more mortgage foreclosures. Under her purposed plan the government would provide guarantees to homeowners in trouble and work with banks to redraft existing mortgages to a more affordable level allowing for more homeowners to stay in their homes.