The financial markets signaled excitement about rising home sales by closing higher on Monday. Most investors welcomed the good news that home sales in October had risen for the second month in a 432296_real_estate_agent_1row.  Experts believe more buyers are coming into the market because of two factors:  Falling prices and the federal tax credit for first time home buyers.

By region, home sales closed up as follows:

  • Midwest 26%
  • Northeast 25%
  • South 23%
  • West 10%

Experts also indicate that the market should remain strong in the spring. Again, falling prices and the extended tax credit through April 30th may help to boost sales.  A Move.com survey indicates that about 5% of consumers will buy a home next year. The demographics of those most likely to sign a purchase and sale agreement include:

  • Consumers under age 34
  • Consumers residing in Southern or Western states

The motivating factors for consumers to make a purchase next year will range from the belief that prices are bottoming out to the worry that interest rates may soon rise again. Many consumers also feel the available supply of good houses at discounted prices will probably peak next year. After the holidays, realtors and real estate agencies should begin marketing properties to new and trade-up buyers and emphasize that there may never be a better time to buy a house.

[Sources: October home sales rise 10.1% from September, AP, 11.23.09; Elphinstone, J.W. 5% of Americans plan to buy a home, AP, 11.11.09]