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Existing-Home Sales Continue to Rise

 According to the National Association of Realtors®, existing-home sales rose again in November as first-time buyers rushed to close sales before the original Nov. 30 deadline for the recently extended and expanded tax credit.

Existing-home sales rose 7.4 percent to a seasonally-adjusted annual rate of 6.54 million units in November from 6.09 million in October, and are 44.1 percent higher than the 4.54 million-unit pace in November 2008. Current sales remain at the highest level since February 2007 when they hit 6.55 million.

“This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” said NAR Chief Economist Lawrence Yun. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010.

“In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline.”

The national average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped to 4.88 percent in November from 4.95 percent in October; the rate was 6.09 percent in November 2008, according to Freddie Mac. Last month’s mortgage interest rate was the second lowest on record after bottoming at 4.81 percent in April 2009.

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Existing-Home Sales Show Big Gain

Driven by the first-time buyer tax credit, existing-home sales showed another big gain in October with a strong up trend established over the past seven months, while inventories continue to decline, according to the National Association of Realtors®.

Existing-home sales — including single-family, townhomes, condominiums and co-ops — surged 10.1 percent to a seasonally-adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.

“Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November,” said NAR Chief Economist Lawrence Yun. “With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer.”

Now that the tax credit has been extended and expanded, potential buyers have until April 30 to have a contract in place. “There is still a large pent-up demand that can be tapped before the tax credit expires,” said Yun.

Total housing inventory at the end of October fell 3.7 percent to 3.57 million existing homes, representing a 7.0-month supply at the current sales pace, down from an 8.0-month supply in September. Unsold inventory totals are 14.9 percent below a year ago.

The national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.95 percent in October from 5.06 percent in September, according to Freddie Mac, adding that the 30-year rate recently dropped to 4.83 percent.

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Home Sales Continue Rising Trend

According to the National Association of Realtors®, sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and a first-time buyer tax credit. May’s increase was the first back-to-back monthly gain since September 2005.

“Historically low mortgage interest rates clearly drew buyers into the market and housing remains very affordable even with a recent up tick in rates,” said NAR Chief Economist Lawrence Yun, who expected the improvement. “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 percent to 3.80 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace.

NAR President Charles McMillan agreed with Yun, adding that the first-time buyer tax credit should be expanded to all buyers of primary homes regardless of income.

The national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 4.86 percent in May from a record low 4.81 percent in April, according to Freddie Mac.

Lets hope this trend continues! The Lewisville-Flower Mound market remains steady with home sales increasing which is expected at this time of year.  To search for a Lewisville home click here.   To search for a Flower Mound home, click here.

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Home Sales Increasing in Many Areas

According to the National Association of Realtors® (NAR), historically high housing affordability and low mortgage interest rates, combined with buyer opportunities in the distressed sales market, have increased home sales in many areas of the country.

“There has never been a better time to buy,” said NAR Chief Economist Lawrence Yun, who presented the report at a recent Economic Issues and Residential Real Estate Business Trends forum. Yun commented on a convergence of favorable buying conditions while emphasizing how important it is for home buyers to stay within their budgets.

“Housing affordability is at an all-time high, mortgage rates are historically low, and interest rates are the lowest they’ve been since the days of Eisenhower,” said Yun. “Now that buyers will be able to use the $8,000 tax credit as a down payment, we should see additional buyers enter the market.” Yun said he doesn’t anticipate an immediate pickup in the coming months, but believes early summer will be a critical indicator of how home buyers are responding to the tax credit.

“The stimulus and falling inventory levels will help stabilize prices,” said Yun. “My projection is home sales will be 10 to 20 percent higher the second half of this year than last year and we will come out of this recession in 2010.”

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First-Time Buyers Responding to Incentives

According to the National Association of Realtors®, existing-home sales eased in March but first-time buyers are responding to low mortgage interest rates and tax credits.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 3 percent to a seasonally adjusted annual rate of 4.57 million units in March from a downwardly revised level of 4.71 million in February, and were 7.1 percent lower than the 4.92 million-unit pace in March 2008.

NAR Chief Economist Lawrence Yun said the market appears to be stabilizing with modest monthly ups and downs, and that first-time buyers are driving the market. “The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey,” he said. “Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.”

Although prices rose from February to March, the national median existing-home price for all housing types was $175,200, down 12.4 percent from March 2008. The price increase from February to March was 4.2 percent, which is much higher than the typical 1.8 percent seasonal increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20 percent less than traditional homes.

A NAR practitioner survey in March showed first-time buyers accounted for 53 percent of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available. “Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” Yun said. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 5.00 percent in March from 5.13 percent in February.

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First-Time Buyers Responding to Incentives

According to the National Association of Realtors®, existing-home sales eased in March but first-time buyers are responding to low mortgage interest rates and tax credits.Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 3 percent to a seasonally adjusted annual rate of 4.57 million units in March from a downwardly revised level of 4.71 million in February, and were 7.1 percent lower than the 4.92 million-unit pace in March 2008. NAR Chief Economist Lawrence Yun said the market appears to be stabilizing with modest monthly ups and downs, and that first-time buyers are driving the market. “The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey,” he said. “Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.”

Although prices rose from February to March, the national median existing-home price for all housing types was $175,200, down 12.4 percent from March 2008. The price increase from February to March was 4.2 percent, which is much higher than the typical 1.8 percent seasonal increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20 percent less than traditional homes. A NAR practitioner survey in March showed first-time buyers accounted for 53 percent of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available. “Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” Yun said. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 5.00 percent in March from 5.13 percent in February.

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Existing-Home Sales Rise in February

Existing-home sales increased in February, reversing losses in January, according to a recent report from the National Association of Realtors®. Even so, sales activity remains relatively soft, reflecting additional layoffs and buyers waiting for housing provisions in the economic stimulus package to take effect.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February from a pace of 4.49 million units in January. Seasonal adjustment factors are more volatile in winter months, but sales rates over the past few months show dampened sales activity.

“Because entry-level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February,” said Lawrence Yun, NAR chief economist, noting that most of the activity concentrated in lower price ranges. “Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price.”

The national median existing-home price for all housing types was $165,400 in February, down 15.5 percent from a year ago when the median was $195,800 and conditions were close to normal.

“Given the downward distortion in price comparisons due to distressed sales, it’s important for owners to keep in mind that this doesn’t equate to a similar loss of value for traditional homes in good condition,” said Yun, adding that a recovery in the West was much stronger than expected. “Strong sales gains in the West are led by California, where the median listing price is beginning to rise for the first time in three years.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 5.13 percent in February from a record low 5.05 percent in January; the rate was 5.92 percent in February 2008.