Existing home sales data
The National Association of Realtors is reporting a 0.8% drop in existing home sales in April, a 12.9% drop from April 2010 (which was near the end of the home buyer tax credit). Distressed homes accounted for over one in three homes sold in April, up 4% from April 2010.
The national median existing home price was $163,700, down 5% from April 2010. Although this number is down, NAR Chief Economist Lawrence Yun calls this rate “remarkably stable” as it has been in the $160-170 range for three years now.
Yun said the market is underperforming. Yun also noted, “Given the great affordability conditions, job creation and pent-up demand, home sales should be stronger. Although existing-home sales are expected to trend up unevenly through next year, unnecessarily tight credit is continuing to restrain the market, along with a steady level of low appraisals that result in contract cancellations. Although sales are clearly up from the cyclical lows of last summer, home sales are being held back 15 to 20 percent due to the very restrictive loan underwriting standards.”
NAR President Ron Phipps said, “We want to ensure that qualified buyers will be able to own their property on a sustained basis from a sound credit evaluation, but banks needn’t be so stingy as to only lend to those with the highest credit scores. Very high shares of cash purchases, and high credit score requirements, have led to historically low default rates among home buyers over the past two years. This trend implies a gulf is opening between those who can and cannot have access to the American dream of home ownership. At the same time, existing guidelines from Freddie Mac and Fannie Mae must be fully implemented so all appraisals are done by valuators with local expertise.”