Lawrence Yun, NAR chief economist, said many potential buyers remain on the sidelines. "Subprime loans and other risky mortgage products have virtually disappeared from the marketplace, and over the past five months, this has been reflected in soft but fairly stable home sales," he said. "As the increased limits for FHA and conventional loans are implemented, more buyers will have access to safer FHA loans and lower interest rate loans in high-cost areas, which could lead to steadily higher home sales later in the year."
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.76 percent in January from 6.10 percent in December; the rate was 6.22 percent in January 2007. Last week, Freddie Mac reported the 30-year fixed rate rose to 6.04 percent. The national median existing-home price for all housing types was $201,100 in January, down 4.6 percent from a year ago when the median was $210,900. Because the slowdown in sales is greater in high-cost markets, there is a downward pull to the national median from a year ago when there were relatively more sales in higher priced areas.
Price changes within metropolitan areas are more meaningful for consumers. The latest data shows roughly half of the metro areas in the U.S. with price gains, with healthy increases in markets such Buffalo, Peoria and Amarillo. "Some markets like Barnstable, Mass., which had been weakening in the past year, may have turned the corner," Yun said.
NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said some buyers in high-cost are waiting for higher limits on conventional loans. "Keep in mind the biggest slowdown in home sales last year was in high-cost markets, which were hard-hit by the credit crunch and notably higher interest rates for jumbo loans, but relief is on the way," he said. "Once buyers have greater access to higher loan limits, it will take a few months for increased shopping activity to translate into higher sales," Gaylord said. "We should see some movement of pent-up demand by this summer, but higher loan limits need to be implemented fully and promptly to have maximum benefit."
Total housing inventory rose 5.5 percent at the end of January to 4.19 million existing homes available for sale, which represents a 10.3-month supply at the current sales pace, up from a 9.7-month supply in December. Single-family home sales rose 0.5 percent to a seasonally adjusted annual rate of 4.34 million in January from 4.32 million in December, and are 22.4 percent below 5.59 million-unit pace in January 2007. The median existing single-family home price was $198,700 in January, down 5.1 percent from a year ago.
Existing condominium and co-op sales fell 6.5 percent to a seasonally adjusted annual rate of 550,000 units in January from 588,000 in December, and are 30.2 percent below the 788,000-unit level a year ago. The median existing condo price was $220,400 in January, which is 1.0 percent lower than January 2007. Regionally, existing-home sales in the Midwest rose 3.4 percent to an annual pace of 1.20 million in January, but are 20.0 percent below January 2007. The median price in the Midwest was $154,200, down 4.0 percent from a year ago.
Existing-home sales in the South slipped 0.5 percent in January 2007 to a level of 1.95 million and are 22.0 percent below a year ago. The median price in the South was $164,300, which is 5.9 percent lower than January 2007. In the West, existing-home sales declined 2.1 percent to an annual rate of 930,000 in January and are 28.5 percent below January 2007. The median price in the West was $300,100, down 6.7 percent from a year ago.
Existing-home sales in the Northeast fell 3.6 percent to an annual rate of 810,000 in January, and are 25.7 percent below a year ago. The median price in the Northeast was $270,800, up 3.1 percent from January 2007.
