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US property market seeing an uneven recovery, latest data suggests

Existing home sales, which are completed transactions that include single family, townhomes, condominiums and co-ops, increased 3.7% to a seasonally adjusted annual rate of 5.10 million in March from an upwardly revised 4.92 million in February.

But sales are 6.3% below the 5.44 million pace in March 2010. Sales were at elevated levels from March through June of 2010 in response to the home buyer tax credit, the NAR report points out.

Lawrence Yun, NAR chief economist, said he expects the improving sales pattern to continue. ‘Existing home sales have risen in six of the past eight months, so we’re clearly on a recovery path,’ he said.
‘With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain primarily because some buyers are finding it too difficult to obtain a mortgage. For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows,’ he explained.

NAR’s housing affordability index shows the typical monthly mortgage principal and interest payment for the purchase of a median priced existing home is only 13% of gross household income, the lowest since records began in 1970.

‘Although home sales are coming back without a federal stimulus, sales would be notably stronger if mortgage lending would return to the normal, safe standards that were in place a decade ago before the loose lending practices that created the unprecedented boom and bust cycle,’ Yun explained.

‘Given that FHA and VA government backed loan programmes turned a modest profit over to the US Treasury last year, and have never required a taxpayer bailout, we believe low down payment loans should continue to be available for those consumers who have demonstrated financial responsibility and are willing to stay well within their budget. Raising the down payment requirement would unnecessarily deny credit to many worthy middle-class families and veterans,’ he added.

A parallel NAR practitioner survey shows that first time buyers bought 33% of homes in March, compared with 34% of homes in February. This compares with 44% in March 2010. All cash sales were at a record market share of 35% in March, up from 33% in February and compared with 27% in March 2010. 
Investors accounted for 22% of sales activity in March, up from 19% in February and 19% in March 2010. The balance of sales were to repeat buyers.

The national median existing home price for all housing types was $159,600 in March, down 5.9% from March 2010. Distressed homes, typically sold at discounts of around 20%, accounted for a 40% market share in March, up from 39% in February and 35% in March 2010.

Single family home sales increased 4% to a seasonally adjusted annual rate of 4.45 million in March from 4.28 million in February, but are 6.5 percent below the 4.76 million level in March 2010. The median existing single family home price was $160,500 in March, down 5.3% from a year ago.

Existing condominium and co-op sales increased 1.6% to a seasonally adjusted annual rate of 650,000 in March from 640,000 in February, but are 4.1% below the 678,000 unit pace a year ago. The median existing condo price was $153,100 in March, which is 10.1% below March 2010.

Regionally, existing home sales in the Northeast rose 3.9% to an annual level of 800,000 in March but are 12.1% below March 2010. The median price in the Northeast was $232,900, down 3% from a year ago.
While existing home sales in the Midwest increased 1% to a pace of 1.06 million but are 13.1% lower than a year ago. The median price in the Midwest was $126,100, which is 7.1% below March 2010.

In the South, existing home sales increased 8.2% to an annual level of 1.99 million in March but are 1% below March 2010. The median price in the South was $138,200, down 6.6% from a year ago. Existing home sales in the West slipped 0.8% to an annual pace of 1.25 million in March and are 3.1% below a year ago. The median price in the West was $192,100, which is 11.2% lower than March 2010.