Happy thursday! here is some more info on the existing home sales. Some good some bad news.
Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions
and a first-time buyer tax credit, according to the National Association of Realtors®. May’s increase
was the first back-to-back monthly gain since September 2005.
Existing-home sales-including single-family, townhomes, condominiums and co-ops-rose 2.4 percent to a
seasonally adjusted annual rate of 4.77 million units in May from a downwardly revised level of 4.66
million units in April, but remained 3.6 percent below the 4.95 million-unit pace in May 2008.
Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very
affordable even with a recent uptick in rates. First-time buyers also are being drawn off the
sidelines by the $8,000 tax credit, which is helping to absorb inventory. However, the increase in
sales is less than expected because poor appraisals are stalling transactions. Pending home sales
indicated much stronger activity, but some contracts are falling through from faulty valuations that
keep buyers from getting a loan.
Total housing inventory at the end of May fell 3.5% to 3.80 million existing homes available for sale,
which represents a 9.6-month supply2 at the current sales pace, down from a 10.1-month supply in
April.
The appraisal problem is serious. Lenders are using appraisers who may not be familiar with a
neighborhood, or who compare traditional homes with distressed and discounted sales. In the past
month, stories of appraisal problems have been snowballing from across the country with many contracts
falling through at the last moment. There is danger of a delayed housing market recovery and a further
rise in foreclosures if the appraisal problems are not quickly corrected.
A NAR practitioner survey in May showed first-time buyers accounted for 29% of transactions, and that
the number of buyers looking at homes is nearly 10 percentage points higher than a year ago.
The NATIONAL MEDIAN existing-home price for all housing types was $173,000 in May, down 16.8% from a
year earlier. Distressed properties, which declined to 33% of all sales in May from 45% in April,
continue to downwardly distort the median price because they generally sell at a discount relative to
traditional homes.
First-time buyers are concentrated in the lower price ranges, which include most of the distressed
sales.
Single-family home sales rose 1.9% to a seasonally adjusted annual rate of 4.25 million in May from a
pace of 4.17 million in April, but are 3.0% below the 4.38 million-unit level in May 2008. The median
existing single-family home price was $172,900 in May, down 16.1% from a year ago.
Existing condominium and co-op sales increased 6.1% to a seasonally adjusted annual rate of 520,000
units in May from 490,000 in April, but are 8.9% below the 571,000-unit level in May 2008. The median
existing condo price4 was $173,800 in May, down 21.9% from a year earlier.
Existing-home sales in the Midwest jumped 9.0% in May to a pace of 1.09 million but are 4.4% below May
2008. The median price in the Midwest was $145,800, which is 10.4% lower than a year ago.
In the South, existing-home sales were unchanged at an annual pace of 1.74 million in May but are 8.9%
below a year ago. The median price in the South was $157,400, down 9.9% from May 2008.
Existing-home sales in the West slipped 0.9% to an annual rate of 1.14 million in May, but are 11.8%
higher than May 2008. The median price in the West was $197,700, down 30.6% from a year ago.
