In line with Zillow’s recent report that home values have taken a hit, the National Association of Realtors (NAR) is now reporting that over the previous year, prices of existing homes dropped 2.8% in the second quarter of this year, typically the strongest selling season.
Home prices have jumped up and dipped down but over the past eight quarters have hovered around the same place, with the median price of all existing homes sold in the second quarter landing at $171,900.
Also in the second quarter, sales volume dipped 5.4% from the first quarter and dropped 12.7% from the second quarter of 2010. NAR’s Affordability Index is performing well as are low interest rates and mortgage application volume, but sales and prices are down, nonetheless.
Dr. Yun says housing should be stronger
NAR Chief Economist, Dr. Lawrence Yun said, the narrow range of median home price fluctuation shows a stabilization trend. “Markets showing consistent price stability or increases are those with solid labor market conditions, such as in Washington, D.C.; San Antonio; or Fargo, N.D.”
Dr. Yun also noted the median price measurement reflects the types of homes that are selling during the quarter and can be misleading at times. “The level of foreclosures, which can artificially depress median prices, can vary notably in given markets. The annual price gauge smoothes out the quarterly swings and has shown fairly stable price trends in most markets.”
Continuing the trend of NAR being realistic with their economic outlooks, Dr. Yun noted that the housing sector should be stronger.
“With home prices in a broad trough and historically low mortgage interest rates, high housing affordability conditions and rising rents could stimulate a more rapid sales recovery if banks get back into the business of lending to more creditworthy borrowers,” Dr. Yun said.