Sales of existing homes went up as expected in April. Homes bought in lower price ranges led the way according to the National Association of Realtors on Wednesday. Another report came out from FHFA which indicate prices may be stablizing.
Existing home sales were up 2.9% in April.
“Most of the sales are taking place in lower price ranges and activity is beginning to pick up in the midprice ranges, but high-end home sales remain sluggish,” said Lawrence Yun, NAR chief economist, in the report.
First-time buyers were responsible for 40% of all transactions in April. Moreover, distressed properties accounted for 45% of all sales.
“Because foreclosed properties will likely be released into the market over the rest of year, it is critical that distressed homes be quickly cleared from the market,” Yun said, adding that the sale of foreclosure-related homes sets the stage for healthy conditions.
Single-family home sales rose 2.5% to a rate of 4.18 million in April, a pace that is 2.8% below the level one year ago.
Regionally, sales advanced in three of the four regions. Existing home sales in the Northeast jumped 11.6%, while those in the South increased 1.8%, and sales in the West rose 3.5%. In the Midwest, however, sales slipped 2.0%.
The national median price for all types of existing homes ― including single-family, townhomes, condominiums and co-ops ― was $170,200, representing a 15.4% fall from the same time last year. For single-family homes only, the price was $169,800 in April, which is 14.9% below a year ago.
Inventories of existing home rose 8.8% in April to to 3.97 million, representing a 10.2-month supplyat the current sales pace. The prior month’s figure was 9.6-months, while a healthy market has just a 6-month supply.
Also released at 10 am was a home price report from by the Federal Housing Finance Agency. It said prices fell an additional 1.1% in March, following a 0.2% uptick in February.
"Our latest data are consistent with growing evidence that housing market conditions may be stabilizing in some parts of the country, especially areas not covered by the other major repeat sales price index," said FHFA Director James Lockhart.
His comments stand in opposition to those from David Blitzer, Chairman of Index Committee at Standard & Poor’s, who said on Tuesday the Case-Shiller study of home prices did not suggest price recovery.
“Seventeen metro areas recorded a monthly decline in March, with Minneapolis, Detroit and New York posting record monthly declines,” Blitzer said on Tuesday. He added, “Based on the March data . . . we see no evidence that that a recovery in home prices has begun.”
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Bill Gross started the concerns last week with AAA credit concerns. This has sparked a 4 day selling spree that has gone through the roof today. Servicers, originators, banks, insurance funds, hedge funds, sovereign wealth are pulling their fund out for what looks like a breather. Things should return back to normal once all all the sellers have their orders filled. It's a black Wednesday for mortgage backed securities for sure. It could be weeks or months before it bounces back if it even does. One huge factor is the naivete one must possess to think that the current state of the markets will not be addressed in a "Federal" manner. Uneasiness over the growing government debt load and the credit rating for the US is continuing to cast a large shadow over the bond market. This is in conjuction with a prolonged period of overly optomistic economic exuberance enjoyed by stock traders. The Case Schiller Home price index release yesterday indicated that home prices have fallen 18.7% over the last 12 months. Usually this is the most thinly traded time of the day for mortgage backed securities and the weakness is very apparent. The final week of May is a big one for the real estate market as housing data dominates the headlines for the next three days. Tuesday sees the Case Shiller report on home prices for March as well as the first quarter; on Wednesday markets will receive the latest data on Existing Home Sales; and on Thursday April’s New Home Sales release is published. Overall, the reports are likely to show the recession slowing down but signs of full stabilization are still in the distance. Make sure to thank a vet today for everything they have done! Friday won’t see a single data release, but there’s plenty on the minds of investors as worries abound that the U.S. currency could lose its AAA-rating. In addition, two gloomy speeches from central bank officials Thursday evening brought the U.S. dollar down a notch overnight. Long term mortgages rates declined slightly last week although none reached the record lows that were established a few weeks ago The weekly survey of Jobless Claims failed to indicate any turnaround in the labor market on Thursday. Initial claims for unemployment benefits were more than expected, and those continuing to receive benefits once again jumped to an all-time high. As scheduled, the FOMC has released the minutes from it's recent policy meeting ending April 29th. |
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