Home sales for the first quarter were down 6.8% from a year ago.  Half of the sales were first-time buyers attracted to the low prices of these foreclosed properties. The National Association of Realtors estimates that the Stimulus Package will add about 900,000 additional home sales later this year. This would reduce inventory to an 8-month supply, down from an 11-month high earlier this year.  

What It Means to You

Mortgage rates continue to drop. A 30-year, conventional, fixed-rate mortgage fell to 5.06% in the first quarter, down from 5.88% a year ago.  Median home prices in January were $169,000, down 27% from the peak of $231,000 in June 2006. That is more than the decline in home prices that occurred during the Great Depression. (Source: NAR, Foreclosures Weigh Down Sales, May 12, 2009)

Best Moves Now

• The Drawbacks to Buying Foreclosures
• How Much Home Can You Afford to Buy?
• What Is Wrong with Buy and Bail?