RISMEDIA, September 25, 2010—Existing-home sales rose in August 2010 following a big correction in July, according to the National Association of Realtors. Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6% to a seasonally adjusted annual rate of 4.13 million in August from an upwardly revised 3.84 million in July, but remain 19.0% below the 5.10 million-unit pace in August 2009.
Lawrence Yun, NAR chief economist, said home sales still remain subpar. “The housing market is trying to recover on its own power without the home buyer tax credit. Despite very attractive affordability conditions, a housing market recovery will likely be slow and gradual because of lingering economic uncertainty,” Yun said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.43% in August from 4.56% in July; the rate was 5.19% in August 2009.
Yun added, “Home values have shown stabilizing trends over the past year, even as the economy shed millions of jobs, because of the home buyer tax credit stimulus. Now that the economy is adding some jobs, the housing market needs to steadily improve and eventually stand on its own.”
The national median existing-home price for all housing types was $178,600 in August, up 0.8% from a year ago. Distressed homes rose to 34% of sales in August from 32% in July; they were 31% in August 2009.
NAR President Vicki Cox Golder, owner of a real estate company in Tucson, Arizona, said consumers have been getting mixed signals about the housing market. “People understand the good affordability conditions with stable home prices in most areas, but they’re concerned about the economy and speculation on Wall Street,” she said. “We need to stick with the facts about the long-term value of homeownership and avoid unrealistic assessments. Tight credit and slow short sales are ongoing problems—expediting short sales will help the market recover more quickly.”
Total housing inventory at the end of August slipped 0.6% to 3.98 million existing homes available for sale, which represents an 11.6-month supply at the current sales pace, down from a 12.5-month supply in July.
A parallel NAR practitioner survey shows first-time buyers purchased 31% of homes in August, down from 38% in July. Investors rose to a 21% market share in August from 19% in July; the balance of purchases were by repeat buyers. All-cash sales slipped to 28% in August from 30% in July.
Single-family home sales rose 7.4% to a seasonally adjusted annual rate of 3.62 million in August from a level of 3.37 million in July, but are 19.2% lower than the 4.48 million level in August 2009. The median existing single-family home price was $179,300 in August, up 1.2% from a year ago.
Single-family median existing-home prices were higher in 10 out of 19 metropolitan statistical areas reported in August from a year ago (the price in one of 20 tracked markets was not available). Existing single-family home sales were down in all 20 metro areas from August 2009.
Existing condominium and co-op sales increased 8.5% to a seasonally adjusted annual rate of 510,000 in August from 470,000 in July, but are 17.1% below the 615,000-unit pace in August 2009. The median existing condo price was $174,000 in August, which is 2.8% below a year ago.
Regionally, existing-home sales in the Northeast rose 7.9% to an annual level of 680,000 in August but are 24.4% below August 2009. The median price in the Northeast was $260,300, up 7.6% from a year ago.
Existing-home sales in the Midwest increased 5.0% in August to a pace of 840,000 but are 26.3% below a year ago. The median price in the Midwest was $149,600, up 0.4% from August 2009.
In the South, existing-home sales rose 5.2% to an annual level of 1.62 million in August but are 13.4% below August 2009. The median price in the South was $155,000, down 1.5% from a year ago.
Existing-home sales in the West jumped 13.8% to an annual pace of 990,000 in August but are 16.1% lower than August 2009. The median price in the West was $214,700, which is 2.5% below a year ago.
For more information, visit www.realtor.org.
Phil Hobson, Prudential Texas Properties, H Group
www.hgroupdallas.com
(214) 659-3624