Existing Home Sales Rise, but So Does Inventory


A rise in existing home sales could open the floodgates to sales of even more homes in some regions of the U.S. as the buying season heats up. But that doesn't necessarily mean home values are expected to increase in the near future.

An uptick in hiring, still-low mortgage rates, and a pent-up demand are working to create a more robust housing market than last year, especially in markets in the Northeast and Northwest. A strong April, boosted by the tax-credit deadline, kicked off the all-important buying season: The National Association of Realtors reported that sales of existing homes rose 7.6 percent in April from the same month in 2009.

But there is one more thing to consider in this equation: The number of homes on the market actually increased from March to April. The 4.04 million homes for sale across the country, and 11.5 percent jump from March, equal an 8.4-month supply, given the current pace of sales.

At least the numbers -- even the anemic ones -- are headed in the right direction.