The U.S. housing market recovery is in full swing, but experts with the National Association of Realtors (NAR) argue that sales could be even better if it weren’t for bank limits put on lending. The NAR insists that qualifying conditions are too strict and that even able buyers are having trouble finding financing. Even so, median house prices were up 9.5% in August from a year ago and sales are climbing, particularly in western states and in Florida. Total housing inventory has increased, but improved market performance is helping to provide an answer to the larger supply despite a drop in first-time homebuyers. For more on this continue reading the following article from Property Wire.
Existing home sales in the United States continued to improve in August and the national median price rose on a year on year basis for the sixth straight month, according to the latest data from the National Association of Realtors.
Prices and sales are rising despite difficult mortgage market conditions with the national median house price now 9.5% up from a year ago but sales could be 10% stronger if loans were easier to come buy, says the US’s largest real estate trade organisation.
Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 7.8% to a seasonally adjusted annual rate of 4.82 million in August from 4.47 million in July, and are 9.3% higher than the 4.41 million unit level in August 2011.
Lawrence Yun, NAR chief economist, said favourable buying conditions get the credit. ‘The housing market is steadily recovering with consistent increases in both home sales and median prices. More buyers are taking advantage of excellent housing affordability conditions,’ he said.
‘Inventories in many parts of the country are broadly balanced, favouring neither sellers nor buyers. However, the West and Florida markets are experiencing inventory shortages, which are placing pressure on prices,’ he added.
According to Freddie Mac, the national average commitment rate for a 30 year, conventional, fixed rate mortgage rose to 3.6% in August from a record low 3.55% in July. The rate was 4.27% a year ago.
‘The strengthening housing market is occurring even with difficult mortgage qualifying conditions, which is testament to the sizable stored-up housing demand that accumulated in the past five years,’ said Yun.
The national median existing home price for all housing types was $187,400 in August, up 9.5% from a year ago. The last time there were six back to back monthly price increases from a year earlier was from December 2005 to May 2006. The August increase was the strongest since January 2006 when the median price rose 10.2% from a year earlier.
Distressed homes, that is foreclosures and short sales sold at deep discounts, accounted for 22% of August sales of which 12% were foreclosures and 10% were short sales, down from 24% in July and 31% in August 2011. Foreclosures sold for an average discount of 19% below market value in August, while short sales were discounted 13%.
Total housing inventory at the end August rose 2.9% to 2.47 million existing homes available for sale, which represents a 6.1 month supply at the current sales pace, down from a 6.4 month supply in July. Listed inventory is 18.2% below a year ago when there was an 8.2 month supply.
The median time on market was 70 days in August, consistent with 69 days in July but down 23.9% from 92 days in August 2011. Some 32% of homes sold in August were on the market for less than a month, while 19% were on the market for six months or longer
‘Total sales this year will be 8 to 10% above 2011, but some buyers are frustrated with mortgage availability. If most of the financially qualified buyers could obtain financing, home sales would be about 10 to 15% stronger, and the related economic activity would create several hundred thousand jobs over the period of a year,’ said NAR president Moe Veissi.
First time buyers accounted for 31% of purchasers in August, down from 34% in July and 32% in August 2011.
All cash sales were unchanged at 27% of transactions in August, lower than the 29% in August 2011. Investors, who account for most cash sales, purchased 18% of homes in August, up from 16% in July but less than the 22% in August 2011.
Single amily home sales rose 8% to a seasonally adjusted annual rate of 4.30 million in August from 3.98 million in July, and are 10% above the 3.91 million unit pace in August 2011. The median existing single family home price was $188,700 in August, up 10.2% from a year ago.
Existing condominium and co-op sales increased 6.1% to a seasonally adjusted annual rate of 520,000 in August from 490,000 in July, and are 4% above the 500,000 unit level a year ago. The median existing condo price was $176,700 in August, which is 3.3% higher than August 2011.
Regionally, existing home sales in the Northeast rose 8.6% to an annual pace of 630,000 in August and are also 8.6% above August 2011. The median price in the Northeast was $245,200, up 0.6% from a year ago.
Existing home sales in the Midwest increased 7.7% in August to a level of 1.12 million and are 17.9% higher than a year ago. The median price in the Midwest was $152,400, up 7.8% from August 2011.
In the South, existing-home sales rose 7.3% to an annual pace of 1.90 million in August and are 11.1% above August 2011. The median price in the region was $160,100, up 6.5% from a year ago.
This article was republished with permission from Property Wire.