August 3rd, 2007 9:50 AM by Ron Mastrodonato
June Prices Rise, Existing-Home Sales DeclineSales of existing homes fell in June with some potential buyers staying on the sidelines, but prices rose modestly as inventories eased, according to the NATIONAL ASSOCIATION OF REALTORS®. Total existing-home sales — including single-family, townhomes, condominiums, and co-ops — declined 3.8 percent to a seasonally adjusted annual rate of 5.75 million units in June from a downwardly revised level of 5.98 million in May. Existing-home sales are 11.4 percent below the 6.49 million-unit pace in June 2006. “Two bright spots in the June report are a decline in housing inventory and a modest gain in home prices,” says Lawrence Yun, NAR senior economist. “Although we’ve seen seasonal month-to-month price increases over the past four months, this is the first time in 11 months that the median home price is higher than the year-ago price.”The national median existing-home price for all housing types was $230,100 in June, up 0.3 percent from June 2006 when the median was $229,300. The median is a typical market price where half of the homes sold for more and half sold for less.Meanwhile, total housing inventory fell 4.2 percent at the end of June to 4.2 million existing homes available for sale, which represents an 8.8-month supply at the current sales pace, the same as a downwardly revised 8.8-month supply in May. Consumer Reluctance Yun says some consumers are uncertain about the current real estate market. “Home buyers have been getting mixed signals about the housing market, which is causing some of them to hesitate,” he says. “Mortgage interest rates have risen recently, and tightening lending standards are continuing to hamper sales, but fewer risky loans will put the market on a healthier path. Although general buying conditions remain favorable for long-term home buyers, it appears some buyers are looking for more signs of stability before they have enough confidence to make an offer.”According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.66 percent in June, up from 6.26 percent in May; the rate was 6.68 percent in June 2006.NAR President Pat V. Combs says that local market conditions vary widely. “Consumers should avoid making decisions based on what they hear about the national market because all real estate is local,” she says. “There are pockets around the country where home sales are quite strong."— REALTOR® Magazine OnlineFor more economic news and research reports, visit NAR's Research division at REALTOR.org.
Bank-Owned Brokerage Prohibition in SpotlightA letter from U.S. Rep. Paul Kanjorski (D-Pa.) on behalf of the REALTOR®-backed Community Choice in Real Estate Act (H.R. 111) and passage by Senate appropriators last week of a rulemaking restriction on banking regulators signal renewed drive to keep banking conglomerates out of real estate brokerage and management. The Senate restriction would permanently ban regulators from using appropriations to finalize a rule that would allow banks to get into brokerage and property management. The ban has passed the Senate in previous years but its been a one-year ban by the House of Representatives that's gotten enacted into law each year for the past several years. In his letter, which appeared last week in a newspaper popular among lawmakers and their staff called The Hill, Kanjorski says passage of H.R. 111, which he originally introduced several years ago with Rep. Kan Calvert (R-Calif.), would settle the matter once and for all. "The House has consistently demonstrated its clear, strong, and growing interest in our legislation," Kanjorski says. "Support in the House has grown to 262 cosponsors during the first six months of the 110th Congress. H.R. 111 would clearly pass brought to the House floor today."Read the letter on REALTOR.org. Source: REALTOR® Magazine OnlineBrowse all of today's news
Cities Are Cool, But People Still Choose SuburbsEducated workers continue to be drawn to the suburbs by the time they reach their mid-30s and have children, says Joel Kotkin, urban anthropologist and expert on city living. Cities' coolness factor isn't enough to lure them in. Kotkin, who is a fellow at the Roger C. Hobbs Institute at Chapman University in Orange, Calif., says research by his employer shows that the desire to live in suburbia has shifted job growth from the urban cores of New York and San Francisco to the Sun Belt, where families and corporations enjoy low property prices.Kotkin also pointed to a study by Temple University showing that Philadelphia-area suburbanites were more likely to consider their neighborhoods “home” than did people who lived in the city. Talented professions, he says, seek "cohesive neighborhoods, home ownership, good schools, recreation and proximity to jobs."Source: Money, Joel Kotkin (07/12/2007)Browse all of today's news
Calif.: Mortgage Defaults Set 10-Year Record Mortgage defaults in California reached the highest level in 10 years as a result of weak home sales and declining home prices, DataQuick Information Systems reported yesterday.Nearly 54,000 default notices were sent to homeowners in April, May, and June, more than twice the 21,000 sent in the second quarter of 2006. Second quarter defaults were up 15.4 percent from the first quarter and reached the highest number since the first quarter of 1996, when defaults peaked at 61,541.Source: The Wall Street Journal (07/24/2007)Browse all of today's news
Mortgage Applications Fall to 5-Month Low Mortgage applications declined 3.6 percent last week, falling on a seasonally adjusted basis from 631.6 the previous week to 609.0 the week ending July 20.This was a five-month low, according to the Mortgage Bankers Association weekly survey.On an unadjusted basis, the Market Composite Index was up 13.1 percent compared with the same week a year ago. The refinance share of mortgage activity increased to 38.5 percent of total applications from 37.7 the previous week.The average interest rate for 30-year fixed-rate mortgages decreased to 6.59 percent from 6.61 percentThe average interest rate for 15-year fixed-rate mortgages decreased to 6.24 from 6.29 percent.The average interest rate for one-year ARMs increased to 5.62 from 5.60 percent.Source: REALTOR® Magazine OnlineBrowse all of today's news