According to the National Association of Realtors (NAR) the number of existing home sales in the U.S. has risen 3.7 percent between February and March. The numbers are still lower than they were a year-ago due to buyers having problems with obtaining mortgage financing.
“Existing home sales have risen in six of the past eight months, so we’re clearly on a recovery path,” said Lawrence Yun, NAR chief economist. “With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain – primarily because some buyers are finding it too difficult to obtain a mortgage. For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows.”
HousingWire reported that the seasonally adjusted annual rate for existing home sales in the U.S. in March rose to 5.10 million from 4.92 million in February. However, the rate is still below the 5.44 million mark it was at in March 2010.
The decrease from 2010 may have something to do with the homebuyer tax credit that was offered in order to encourage consumers to purchase real estate.
“With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain – primarily because some buyers are finding it too difficult to obtain a mortgage,” said Yun.
Homebuyers entering the market are benefiting from record-low mortgage rates. According to NAR’s home affordability index the monthly mortgage principal and interest payment on an average-priced home is at the lowest mark since 1970. It sits at a mere 13 percent of the gross household income.
NAR maintains that it wants conservative and responsible lending to return but is not against certain government-based mortgages.
“Given that FHA (Federal Housing Administration) and VA (Veterans Affairs) government-backed loan programs turned a modest profit over to the U.S. Treasury last year, and have never required a taxpayer bailout, we believe low down payment loans should continue to be available for those consumers who have demonstrated financial responsibility and are willing to stay well within their budget,” Yun said.