Economy Watch: Existing Home Sales Off, But Not as Bad as 2009 Yet
- Jul 23, 2010
July 23, 2010
By Dees Stribling, Contributing Editor
The National Association of Realtors reported on Thursday that existing home sales fell 5.1 percent to an annualized rate of 5.37 million. No one was surprised by this contraction, considering that the plug has been pulled on the federal homebuyer tax credit, but NAR did point out that sales were nevertheless 9.8 percent higher than in June 2009.
A parallel NAR practitioner survey showed that first-time buyers bought 43 percent of U.S. homes in June, down from 46 percent in May. Investors accounted for 13 percent of sales in June, up a bit from 14 percent in May, and the remaining purchases were by repeat buyers. All-cash sales were at 24 percent in June compared with 25 percent in May.
NAR added that distressed homes were at 32 percent of sales last month, compared with 31 percent in May. That seems to be a constant in today’s economy–there are a record number of foreclosures and short sales, after all–because the figure was also 31 percent in June 2009.
Depending on Who Measures It, Home Prices Up (or Down) Year-Over-Year
NAR also reported that national median existing-home price for all housing types was $183,700 in June, which is 1 percent higher than the same month a year ago. The figure is considerably higher than the median in May 2010, which was $174,600, and the median price for the entire year of 2009, which was $172,500.
The Federal Housing Finance Agency likewise said on Thursday that home prices were up recently, though its frame of reference was between April and May. The agency’s House Price Index, which only includes properties whose mortgages are backed by Fannie Mae or Freddie Mac, rose 0.5 percent over that period.
For the 12 months ending in May, however, prices were down 1.2 percent, as measured by the FHFA index. The index is 12.3 percent off its bubble-time peak, which was recorded in April 2007.
Neighborhood Stabilization Fund Gets Boost
The Neighborhood Stabilization Program (NSP), which funds the purchase of foreclosed residential properties by governments and other entities for the purpose of renovating them, has received another $1 billion with the signing of the financial reform bill into law this week. The money represents the third round of funding for the NSP.
The recipients of the funding may establish financing mechanisms for the purchase and redevelopment of foreclosed residential properties; purchase and rehabilitate residential properties that have been abandoned or foreclosed upon and then sell, rent or redevelop them; establish land banks for homes that have been foreclosed upon; demolish blighted structures; or redevelop demolished or vacant properties.
Wall Street recovered on Thursday all (and more) that it lost on Wednesday in the wake of perceived gloominess on the part of Fed chairman Ben Bernanke, with the Dow Jones Industrial Average up 201.77 points, or 1.99 percent. The S&P 500 gained 2.25 percent and the Nasdaq advanced 2.68 percent.