- Kara JohnsonFebruary 22, 2012 - MortgageLoan.com
Wednesday, Feb 22, 2012
Sales of existing homes rose in January, posting their third increase in four months even as prices sank to a 10-year low.
The National Association of Realtors (NAR) reported today that existing home sales in January were up 4.3 percent over Decemberâs level, to a seasonally adjusted annual rate of 4.57 million. That represents a 0.7 percent annual increase over the Jan. 2011 level, which itself represented a temporary sales spike.
At the same time, the median sales price for previously owned homes fell to $154,700, the lowest reported since November 2001. The figure represents a 2.0 percent annual decrease from January 2011.
The falling prices and rising sales are related, according to Lawrence Yun, NAR chief economist, who noted favorable market conditions for buyers.
âThe uptrend in home sales is in line with all of the underlying fundamentals,â Yun said. âPent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents.â
NAR President Moe Veissi said member Realtors have been reporting increasing interest among potential homebuyers compared to one year ago, which combined with favorable economic signs made him cautiously optimistic that home sales will trend upward through the year.
An abundant supply of foreclosed properties on the market continues to exert downward pressure on home prices. Sales of distressed properties made up 35 percent of Januaryâs sales, up from 32 percent in December, with foreclosure sales nearly double that of short sales. Investors, who frequently purchase distressed properties, accounted for 23 percent of all existing home purchases, up from 21 percent in December.