2nd Quarter Existing-Home Sales Rise in Most States, Helped by Affordable Metro Prices

Washington, August 12, 2009

Existing-home sales in the second quarter showed healthy gains from the first quarter in the vast majority of states, and price declines have increased affordability in most metro areas, according to the latest survey by the National Association of Realtors®.

Total state existing-home sales, including single-family and condo, rose 3.8 percent to a seasonally adjusted annual rate¹ of 4.76 million units in the second quarter from 4.58 million units in the first quarter, but remain 2.9 percent below the 4.90 million-unit pace in the second quarter of 2008.

Thirty-nine states experienced sales increases from the first quarter, and nine states were higher than a year ago; the District of Columbia showed both quarterly and annual rises.

Lawrence Yun, NAR chief economist, said the sales gain appears to be sustainable. “With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” he said. “There have been sustained sales gains in Arizona, Nevada and Florida, as well as diverse areas such as Maryland, the District of Columbia and Nebraska. More recently, we’ve seen strong double-digit gains in Idaho, Utah, New Mexico, Washington, Hawaii, New York, New Jersey, Maine, Vermont, Wisconsin, Indiana, South Dakota and Montana.”

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Austin named one of America's fittest cities.

A new report looks at 30 different measures to determine which cities' residents are healthiest.

When it comes to healthy living, Washington, D.C., is seldom mentioned in the same breath as cities like San Francisco, Portland, Ore., and Seattle, all of which are known for their active, health-conscious residents.

But according to a new report, the city of pomp and politics is the healthiest in the nation. In the second annual American Fitness Index (AFI), a publication released by the American College of Sports Medicine, Washington, D.C., edged out Minneapolis-St. Paul, Minn., Denver, Boston and San Francisco.

Walter Thompson, a professor in the department of kinesiology and health at Georgia State University and chair of the AFI's advisory board, says the annual project is designed to give communities a data-driven picture of local health--and nudge residents in the right direction.

"I believe significant success in improving the fitness of the community can occur when the residents truly value healthy behaviors," says Thompson.

Behind the Numbers
The AFI is sponsored by the WellPoint Foundation, the nonprofit arm of the health benefits company WellPoint. The index ranks 45 metropolitan statistical areas (MSAs)--a geographical measurement defined by the U.S. Census Bureau used by federal agencies in collecting, tabulating and publishing federal statistics--that include the city and surrounding suburban area. It measures each city's performance on 30 indicators, including acres of parkland, death rate from cardiovascular disease, the number of primary care physicians per capita and the percent of residents who bicycle or walk to work. The metrics were gathered from government and non-profit organizations. (For the complete methodology, visit www.americanfitnessindex.org.)

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Fed moves to curb housing abuses

The U.S. central bank recommends new rules to limit compensation for mortgage brokers and clarify risks for borrowers.

July 23, 2009: 11:36 AM ET

WASHINGTON (Reuters) -- The Federal Reserve Board Thursday recommended new disclosure rules for homeowners and compensation guidelines for mortgage brokers to correct some abuses of the recent runaway housing market.

Prospective borrowers would receive a one-page notice of key questions about their loan and see a graph comparing their interest rate to that of a low-risk borrower, the Fed said.

Mortgage brokers would not receive greater compensation if they put a borrower into a high-cost loan, under the rules.

"Consumers need the proper tools to determine whether a particular mortgage loans is appropriate for their circumstances," Fed Chairman Ben Bernanke said during an open meeting of the board.

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Nation's Home Sales Seeing Increase

Existing-Home Sales Up Again

Washington, July 23, 2009

Existing-home sales rose for the third consecutive month with inventory easing and home prices declining less sharply in June, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 3.6 percent to a seasonally adjusted annual rate¹ of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2 percent lower than the 4.90 million-unit level in June 2008.

Lawrence Yun, NAR chief economist, is hopeful about the gain. “The increase in existing-home sales occurred in all major regions of the country,” he said. “We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions. Despite the rise in closed transactions, many Realtors® are reporting lost sales as a result of new appraisal standards that went into effect May 1 of this year.”

A June survey of NAR members shows 37 percent experienced at least one lost sale as a result of the new Home Valuation Code of Conduct, with seven out of 10 reporting an increased use of out-of-area appraisers. Seventy percent of NAR appraiser members said consumers were paying higher fees, while 85 percent report a perceived reduction in appraisal quality.

“Clearly the process needs to be revised, but the most logical approach is to use appraisers with local expertise, industry designations and access to local data, who make a physical examination of the property and use apples-to-apples comparisons with nearby home sales,” Yun said. “In many cases, normal homes are being compared with distressed homes sold at a discount, which often are in subpar condition – this is causing real harm to both buyers and sellers.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.42 percent in June from 4.86 percent in May; the rate was 6.32 percent in June 2008. Mortgage interest rates have trended lower in recent weeks.

Total housing inventory at the end of June fell 0.7 percent to 3.82 million existing homes available for sale, which represents a 9.4-month supply² at the current sales pace, down from a 9.8-month supply in May. Raw inventory totals are 14.9 percent below a year ago.

“This is another hopeful sign – if we can keep the volume of sales above the level of new inventory, prices could stabilize in many areas around the end of the year,” Yun said.

An NAR practitioner survey in June showed first-time buyers accounted for 29 percent of transactions, unchanged from May, and that the number of buyers looking at homes is up nearly 12 percentage points from June 2008.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are very good opportunities. “Despite some of the challenges, the housing market continues to demonstrate signs of recovery,” he said. “The temporary first-time buyer tax credit is clearly helping people make a decision and is contributing to the overall stimulus impact, but since it’s taking longer to close transactions, many would-be beneficiaries may not be able to take advantage of the credit before the December 1 expiration date. As a consequence, consumers need the expertise of Realtors® more than ever to navigate both the obstacles and opportunities in today’s market.”

The national median existing-home price³ for all housing types was $181,800 in June, which is 15.4 percent below June 2008. Distressed properties, which accounted for 31 percent of sales in June, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Single-family home sales rose 2.4 percent to a seasonally adjusted annual rate of 4.32 million in June from a level of 4.22 million in May, and are 0.2 percent higher than the 4.31 million-unit pace a year ago. The median existing single-family home price was $181,600 in June, which is 15.0 percent below June 2008.

Existing condominium and co-op sales jumped 14.0 percent to a seasonally adjusted annual rate of 570,000 units in June from 500,000 in May, but are 3.1 percent below the 588,000-unit level in June 2008. The median existing condo price⁴ was $183,300 in June, down 18.9 percent from a year ago.

Regionally, existing-home sales in the Northeast rose 2.5 percent to an annual pace of 820,000 in June, but are 4.7 percent below a year ago. The median price in the Northeast was $249,400, down 5.9 percent from June 2008.

Existing-home sales in the Midwest increased 0.9 percent in June to a level of 1.10 million but are 1.8 percent lower than June 2008. The median price in the Midwest was $157,000, which is 9.1 percent below a year ago.

In the South, existing-home sales rose 4.0 percent to an annual pace of 1.81 million in June but are 3.7 percent below a year ago. The median price in the South was $163,200, down 11.9 percent from June 2008.

Existing-home sales in the West improved by 6.4 percent to an annual rate of 1.16 million in June, and are 11.5 percent higher than June 2008. The median price in the West was $214,800, which is 24.9 percent below a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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REALTORS® SAY HOUSING INCENTIVES HELP ECONOMY, SMALL BUSINESSES

Washington, July 15, 2009

Having a sound and well-functioning real estate sector is critical to our country’s economic growth and development, as well as the growth and sustainability of many small businesses, according to the National Association of Realtors®.

In testimony on Capitol Hill before the House Committee on Small Business, NAR President Charles McMillan noted that the real estate industry supports millions of jobs and services. “By enacting provisions that stabilize America’s real estate markets, you are helping small businesses and America’s communities thrive and prosper,” said McMillan, a Realtor® and broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth.

NAR shared its belief that the 2009 stimulus legislation has proven helpful to small business owners - which includes many Realtors® - most notably by beginning to stabilize the housing market and stimulate the economy. “Along with other tax bills passed in 2007 and 2008, the 2009 stimulus legislation included a number of provisions that are helping the nation recover,” McMillan said.

The focus of NAR’s testimony was on three provisions that are having a positive impact on the real estate industry - the first-time homebuyer tax credit, the elimination of the mortgage cancellation tax, and the SBA loan programs.

The 2009 stimulus increased the amount of the homebuyer tax credit to $8,000 and eliminated the repayment feature of the credit. It also extended the program up to December 1, 2009. “It appears the tax credit is now being embraced based on the number of inquiries we and our members are receiving and the increased activity in the first-time homebuyer market,” said McMillan.

NAR has asked Congress to take steps to ensure the tax credit continues to stimulate the housing market and help families achieve the dream of homeownership. “We hope Congress will extend the tax credit through next year and make the credit available to all purchasers of primary residences,” McMillan said. “Additionally, to be fair, we’d like the repayment requirement from the 2008 stimulus bill to be eliminated so families are not penalized for buying their home just a few months before the new legislation went into effect.”

The second provision is the Mortgage Cancellation Relief Act passed by Congress in 2007. The tax relief has been extended through 2012, but NAR would like to see this become permanent. “It just doesn’t seem right to further penalize a family that has acted responsibly and has lost their home or been forced into a short sale because of market conditions. Eliminating the tax on the excused debt will help many families begin to recover more quickly and maybe will allow them to once again own a home,” McMillan said.

Lastly, NAR addressed the Small Business Administration loan program that provides fee waivers for some of its SBA programs and new loan programs and raised guarantees. “We applaud these efforts,” McMillan said. “However, the SBA often deems independent contractors, which most Realtors® are, ineligible for its programs and its standards are not always evenly applied across regions.” Realtors® and other independent contractors are often denied access to SBA programs. NAR asked Congress for assistance in making these loans available to more small businesses helping them to grow and prosper.

“NAR thanks you for all of your efforts to date. We stand ready to work with Congress and the Obama administration in any way possible to find further solutions to stabilize the real estate market and restore a strong marketplace and economy,” said McMillan.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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100% financing for home purchases available through USDA Rural Development - Moberly, MO - Moberly Monitor-Index

100% financing for home purchases available through USDA Rural Development - Moberly, MO - Moberly Monitor-Index


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Pending Home Sales Record Fourth Straight Monthly Gain

Washington, July 01, 2009

Pending home sales show a sustained uptrend, rising for four consecutive months with very favorable housing affordability and a first-time buyer tax credit boosting activity, according to the National Association of Realtors®.

The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in May, increased 0.1 percent to 90.7 from an upwardly revised reading of 90.6 in April, and is 6.7 percent higher than May 2008 when it was 85.0. The last time there were four consecutive monthly gains was in October 2004.

Lawrence Yun, NAR chief economist, cautions that there could be delays in the number of contracts that go to closing. “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” he said. “Rises in contract activity show buyers are becoming more active even as they face much more stringent loan underwriting standards. Speedy clarification of the appraisal rules could smooth a housing market recovery and support the overall economy.”

The Pending Home Sales Index in the Northeast rose 3.1 percent to 80.9 in May and is 6.8 percent above a year ago. In the Midwest the index slipped 1.3 percent to 89.2 but is 11.4 percent above May 2008. The index in the South declined 1.7 percent to 92.6 in May but is 7.9 percent higher than a year ago. In the West the index rose 2.2 percent to 96.9 and is 0.7 percent above May 2008.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the appraisal issue is complicated. “We see that distressed homes often are selling for 20 percent less than normal homes in the same area, but some appraisals don’t distinguish between traditional homes and distressed property,” he said. “In many cases appraisers from outside the area are being used, but as everyone knows real estate is local and appraisals should be done by an expert with local expertise.”

McMillan said sellers shouldn’t hesitate to speak with an appraiser about their home. “Sellers should feel free to tell an appraiser about improvements and renovations to their home, and how it compares with other homes in the neighborhood,” he said.

“Also, if recent sales in the neighborhood were discounted, but not similar to your home in terms of quality or condition, that should be pointed out. It wouldn’t hurt to put all this in writing, especially if an appraiser is not familiar with your area. A Realtor® could offer guidance and information to help you with this process.”

NAR’s Housing Affordability Index² remains at historic highs. The affordability index fell to 171.6 in May from an upwardly revised 178.8 in April, which was the highest on record dating back to 1970. “Under these conditions the typical family would devote only 14.6 percent of gross income to mortgage principal and interest, which is one of the lowest percentages on record,” Yun said.

The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

A median-income family, earning $60,800, could afford a home costing $296,700 in May with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small down payments are roughly 80 percent of what a median-income family can afford. The affordable price was significantly higher than the median existing single-family home price in May, which was $172,900.

The first-time buyer tax credit also is benefiting the market. “Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade,” Yun said.

Existing-home sales should trend up through the end of the year, with normal local market differences. “The big question is how much the appraisal issue will impact the ability of contracts to go to closing,” Yun said. “We are currently conducting a study to assess the degree to which new appraisal rules are impacting home sales.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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