Dennis' Mortgage Blog

Yesterday the National Association of Realtors (NAR) released its report for the sale of existing homes in March.  Sales in March 2011 were up 3.7% from February 2011 and are on pace for 5.1 million sales in 2011.

In 2010 NAR reports that approximately 4.9 million existing homes were sold, the worst year for total sales since 1997.  With the increase in March sales the new annual projection of 5.1 million sales would reflect an increase of over 4% from 2010. 

While existing homes sales appear to be stabilizing around 5 million homes sold, new home sales (or sales of newly constructed homes) are still struggling and having a difficult time competing with the large amount of inventory on the existing home sale market.  Foreclosures and short-sales still consist of a very large segment of the resale housing market and home builders are losing sales.

Yesterday the Commerce Department reported that new home sales in March were the 10th worst on record and down over 13% from March 2010.  The March sales were on pace for an annual rate of 549,000 units.  At its peak in 2007 new home sales were around 2 million homes sold and the industry employed approximately 8 million workers to build those homes.

A primary factor in the increase in the sale of existing homes was likely a decline in prices.  The national median price in March was $159,600, down almost six percent from the March 2010 median price of $169,600.

Foreclosure are obviously a large factor in the price decrease and there is no report anywhere that indicates a slow down in foreclosure activity through the end of the year.  Speaking to the large number of foreclosure sales is that approximately 35% of all sales nationwide last month were reported to be all cash transactions.

While home sales may be stabilizing in volume, it appears that prices may still be trying to find a floor.  With approximately 8 months of inventory on the national market and banks seeing a steady flow of defaults and foreclosures finding that price floor is going to be a challenge for the industry.

Mortgage rates continue to remain low for the time being.  Call or email Dennis today to determine your purchasing power for a new home loan or monthly savings from a refinance.  Direct dial 562-472-1118