Some good economic news

March 23, 2:40 PMProgressive Politics ExaminerJay McDonough

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It's few and far between, so we should celebrate it when it arrives. 

The National Association of Realtors reported on Monday that sales of existing homes rose 5.1 percent in February after a 5 percent decline in January. Home sales in the Northeast, South, West and Midwest all gained ground for February as buyers scooped up foreclosure properties.

In the West, where home prices have dropped 30 percent from last February, homes sales rose 30 percent last month from a year earlier. In the Northeast, where housing prices have only dropped 4.8 percent, to $251,200, over the last year, sales are down 15 percent for the year. “The areas that fall the fastest are going to recover,” said Guy Cecala, publisher of Inside Mortgage Finance. “There’s going to be a floor established. Seven hundred thousand dollar houses are $250,000 — that’s what’s bringing people back into the markets.”

The Obama administration and the Federal Reserve have introduced aggressive moves to try to lower borrowing costs, keep homeowners out of foreclosure, and stem two years’ of losses in the housing market, which lies at the center of the financial crisis. (Link)

It would be great if this signaled the bottom of the slump.  However, as unemployment rises, one should expect another wave of foreclosures as folks have to give up their homes.  The recently announced Obama plan to address the foreclosure crisis offers eligible homeowners the opportunity for some refinancing relief and may provide some relief, but the story is evidence that the economy is dangerously close to a house of cards.