April 1. This is the day upon which we are reminded of what we are on the other three hundred and sixty-four.
-- Mark Twain

Existing-Homes Sales Show Improvement

According to a late-March report by the National Association of Realtors®, sales of existing homes increased in February and remain within a fairly stable range.

Single-family homes, townhomes, condominiums and co-ops rose 2.9 percent to a seasonally adjusted annual rate of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007. The sales pace has been in a fairly narrow range since last September.

“We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing,” said NAR Chief Economist Lawrence Yun. “Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year.”

The national median existing-home price for all housing types was $195,900 in February, down 8.2 percent from a year earlier. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively fewer sales in higher priced markets, the report said.

Home prices in metropolitan areas indicate a positive trend. The most recent data shows roughly half of the metro areas experiencing price increases, with healthy gains in markets such as Oklahoma City and Trenton, N.J. “In other areas such as Sacramento, a rapid price decline has induced buyers to come into the market and sales are now rising,” said Yun. “The relationship between home prices, interest rates and income has improved to the point where buyers are more serious about making offers.”

The national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.92 percent in February from 5.76 percent in January, according to Freddie Mac.