SILVAR  :  Newsroom  : Real Estate Articles

Real Estate Articles

REALTOR®: Drop in April existing-home sales nationwide affected by tighter lending standards

Wednesday, May 30, 2007

According to a National Association of Realtors® (NAR) report, tighter lending standards affected the drop in April total existing-home sales nationwide. The national median existing-home price also fell in April, compared with the previous year.  Conditions are spotty, however, and homebuyers are encouraged to consult a knowledgeable and experienced Realtor about local markets.

Total existing-home sales, which includes single-family, townhomes, condominiums and co-ops, dropped 2.6 percent to a seasonally adjusted annual rate of 5.99 million units in April from the March level, and are 10.7 percent lower than the pace in April 2006.

The national median existing-home price for all housing types was $220,900 in April, down 0.8 percent from April 2006 when the median was $222,600.

Lawrence Yun, National Association of Realtors® (NAR) senior economist, isn't surprised. 
"We've been anticipating slower home sales because many subprime loan products are no longer available," Yun said. "In addition, increased scrutiny by lenders is stopping risky mortgage origination, which is good for both consumers and the lending community.

Fortunately, a wide availability of conventional mortgage products and the 4.5 million jobs created over the past 24 months will help to stabilize the market going forward."

Even as home sales slip, median home prices are still rising in some areas. In the state of California, home sales also fell in April, but the median home price in the state continues to rise. The California Association of Realtors® (C.A.R.) reported home sales decreased 27.8 percent in April in California compared with the same period a year ago. The median price of an existing, single-family detached home in California during April 2007 was $597,640, a 6.2 percent increase over the revised $562,820 median for April 2006, C.A.R. reported. The April 2007 median price increased 2.1 percent compared with March's revised $585,460 median price.

Since market conditions vary greatly depending on where you live and the local economy, NAR President Pat V. Combs and Mark Burns, president of the Silicon Valley Association of Realtors® (SILVAR), encourage homebuyers to select a local Realtor who is experienced and knowledgeable about the local market.
 
"Because all real estate is local and conditions vary widely, buyers should consult with a Realtor for expertise on conditions in their area," Combs said.

Combs said historically low mortgage interest rates continue to support the housing market.

"Long-term financing remains favorable, but interest rates are rising," she said.  "Although some buyers have a wait-and-see attitude regarding home prices, they should consider that rising interest rates later this year could offset a lower sales price when you get down to the monthly payments.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.18 percent in April. Last week, the fixed rate jumped to 6.37 percent.

Single-family home sales are 11.2 percent below from April 2006. The median existing single-family home price was $220,500 in April, down 0.9 percent from a year ago.

Regionally, existing-home sales in the Midwest are 11.5 percent below a year ago. The median price in the Midwest was $166,600, up 1.9 percent from April 2006.

Existing-home sales in the South slipped are 8.8 percent below April 2006. The median price in the South was $181,100, down 0.3 percent from a year ago.

Existing-home sales in the West are 15.6 percent below a year ago. The median price in the West was $338,200, 2.1 percent lower than last year's figure.

Existing-home sales in the Northeast are 8.8 percent lower than April 2006.  The median existing-home price in the Northeast was $283,600, 0.6 percent below a year ago.

Burns said SILVAR is a professional trade organization representing over 4,000 Realtors and affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley. Members of SILVAR are also members of NAR and subscribe to its strict Code of Ethics.

To find a Realtor in your area, Burns encourages homebuyers, as well as sellers, to visit www.silvar.org.


        


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

» Back to Real Estate Articles

Site Navigation