Existing home sales rose again in January, for the third consecutive month, with the annual rate of 5.36 million marking the first time in seven months that sales activity was higher than a year earlier.
The National Association of Realtors (NAR) released their monthly report on existing home sales on Wednesday.
Home sales are now 5.3 percent above the 5.09 million level in January 2010.
Lawrence Yun, NAR chief economist, said the improvement is good but could be better. “The uptrend in home sales is consistent with improvements in the economy and jobs, which are helping boost consumer confidence,” he said.
He continued, “The extremely favorable housing affordability conditions are a big factor, but buyers have
been constrained by unnecessarily tight credit. As a result, there are abnormally high levels of all-cash purchases, along with rising investor activity.”
A parallel NAR survey shows that first-time buyers purchased 29 percent of homes in January, down from 33 percent in December. Investors accounted for 23 percent of purchases in January, up from 20 percent in December.
All-cash sales rose to 32 percent in January from 29 percent in December, and they are now at the highest level since NAR began measuring them in October 2008.
“Increases in all-cash transactions, the investor market share and distressed home sales all go hand-in-hand. With tight credit standards, it’s not surprising to see so much activity where cash is king and investors are taking advantage of conditions to purchase undervalued homes,” Yun said.
The national median existing-home price for all housing types was $158,800 in January, down 3.7 percent from January 2010. The median home price in December was $168,800. Distressed homes edged up to a 37 percent market share in January from 36 percent in December.
NAR President Ron Phipps, said the median price is being dampened by unusual market factors. “Unprecedented levels of all-cash purchases, primarily of distressed homes sold at deep discounts, undoubtedly pulls the median price downward,” he said. “Given the levels of inventory we see today, we believe that traditional homes in good condition have held their value.”
This article is from DSNews.com: “Existing home sales still on the rise”
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