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Report: Home Resales Increase in April

Existing-home sales rose in April with strong buyer activity in lower price ranges and distressed real estate, according to a ""new report"":http://www.realtor.org/research/research/ehsdata released this week by the ""National Association of Realtors"":http://www.realtor.org (NAR).
The association reported that existing-home sales - including single-family, townhomes, condominiums, and co-ops - increased 2.9 percent to a seasonally adjusted annual rate of 4.68 million units in April. That's an increase from the revised pace of 4.55 million units in March, but despite the monthly bump in numbers, last month's home sales were 3.5 percent below the 4.85 million-unit level in April 2008.
According to Lawrence Yun, NAR's chief economist, most of the sales are taking place in lower price ranges and activity is beginning to pick up in the mid-price ranges, however high-end home sales remain sluggish. ""The Federal Reserve needs to help restore liquidity for the jumbo mortgage market by buying these [high-end] loans under the TALF program,"" he said.
Yun added, ""Because foreclosed properties will likely be released into the market over the rest of year, it is critical that distressed homes be quickly cleared from the market. Fortunately, homebuyers are being attracted to deeply discounted prices and are bidding up many foreclosed listings, particularly in California, Nevada, and Florida - this will set the stage for healthy market conditions going forward.""
An NAR practitioner survey in April showed first-time buyers declined to 40 percent of transactions, implying more repeat buyers are entering the traditional spring home-buying season. It also showed the number of buyers looking at homes has increased 14 percentage points from a year ago. Yun commented, ""This is consistent with our forecast for home sales in the latter part of the year to be 10 to 20 percent higher than the second half of 2008.""
Based on NAR's market data, the national median existing-home price was $170,200 in April, which is 15.4 percent below 2008. The association pointed out that distressed properties, which accounted for 45 percent of all sales in April, continue to downwardly distort the median price.
Even with the increase in home sales, total housing inventory at the end of April rose 8.8 percent to 3.97 million existing homes available for sale, NAR reported. This figure represents a 10.2-month supply at the current sales pace.
Yun explained, ""The gain in inventory is largely seasonal from sellers entering the spring market. Even with the rise, inventory over the past few months has remained consistently lower in comparison with a year earlier.""
Regionally, NAR said, existing-home sales in the Northeast jumped 11.6 percent to an annual pace of 770,000 in April, but are 10.5 percent below April 2008. The median price in the Northeast was $237,400, which is 9.6 percent lower than a year ago.
Sales in the Midwest slipped 2.0 percent in April to a level of one million, and are 9.9 percent lower than a year ago. The median price in the Midwest was $138,800, down 11.7 percent from April 2008.
In the Southern region of the country, April's existing-home sales increased 1.8 percent to an annual pace of 1.74 million, but are still 8.9 percent lower than April 2008. The median price in the South was $148,000, which is 12.8 percent below a year ago.
Existing-home sales in the West rose 3.5 percent to an annual rate of 1.17 million in April. The West is the only region with an annual increase in sales, up a substantial 19.4 percent from April 2008. The median price in the West was $222,600, down 21.8 percent from a year ago.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said conditions are optimal for buyers with good jobs and long-term plans. ""We have record low mortgage interest rates, a wide selection of homes, and affordable prices in most areas,"" McMillan said. ""When you add the $8,000 first-time buyer tax credit, it’s hard to imagine a better time to make an investment in your future through homeownership.""
According to Freddie Mac, the ""national average commitment rate"":http://www.freddiemac.com/pmms/pmms30.htm for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.81 percent in April, down from 5.00 percent in March. By comparison, the rate was 5.92 percent in April 2008.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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