NEW YORK (MainStreet) — Sales of new homes were up 18% in August — a six-year high of 526,000 homes sold, way ahead of the 426,000 expected to sell, says the U.S. Commerce Department. If it stands — the Commerce Department does revise figures — it would be the highest growth rate for new U.S. homes since 1992.
But the news from the residential real estate market isn't all positive. Sales of existing homes slid by 1.8% in August, to 5.05 million, and were down by 5.3% on a year-to-year basis as well, the National Association of Realtors says.
There could be a good explanation: So-called "all cash" investors took some profits and headed for the sideline.
"There was a marked decline in all-cash sales from investors," says Lawrence Yun, the NAR's chief economist. "On the positive side, first-time buyers have a better chance of purchasing a home now that bidding wars are receding and supply constraints have significantly eased in many parts of the country."
"As long as solid job growth continues, wages should eventually pick up to steadily improve purchasing power and help fully release the pent-up demand for buying," he adds.
In the meantime, if you are in the market for either buying or selling a home, boost your chances of getting a better deal by talking to the neighbors. It may seem like an unusual method to cut a great real estate deal, but it really works, says Rhonda Duffy, a listing agent for Realtor.com in Atlanta, Ga.