The Real Deal Miami

Home resales expected to increase in May

June 23, 2009 08:38AM

Home resales nationwide likely advanced in May for the second month in a row as record foreclosures caused prices to drop, economists said. It would mark the first back-to-back increase since 2005. Tax breaks for first-time buyers in the Obama administration’s stimulus plan, falling property values and lower mortgage rates have helped support the market, but the housing recovery will be limited due to rising unemployment and borrowing costs. “We’re seeing some early signs of stabilization in home demand but it’s important to emphasize the level of sales remains extraordinarily low,” said Zach Pandl, an economist at Nomura Securities International. “Housing investment is likely to stop being a drag on growth some time this year but, given the weakness in sales, it’s unlikely to give positive contributions any time soon,” Pandl said.