Housing Prices and Existing-Home Sales Rise in April


In another positive sign for the housing market, existing-home sales and home prices posted increases in April, the National Association of Realtors says.

Existing home sales rose 3.4 percent month-over-month to a seasonally adjusted annual rate of 4.62 million in April, which is 10 percent above last year's April estimate, the NAR says. And for the second month in a row, the national median existing-home price -- which was $177,400 in April -- posted an annual increase of 10.1 percent in April.

NAR chief economist Lawrence Yun said in a statement that a contracting supply of bank-owned homes, homes in a state of foreclosure, homes at risk of foreclosure and shrinking foreclosure sales were helping to spur a recovery. The analytics firm CoreLogic recently released data showing that the foreclosure supply had fallen from 1.5 million to 1.4 million in March 2012.

Due to government scrutiny and the mounting costs of foreclosures, lenders are gravitating toward foreclosure alternatives such as short sales, helping homeowners avoid foreclosure or lifting them out of it. And against the backdrop of rising employment, record-low mortgage interest rates and rock-bottom prices are coaxing buyers into the market. The rate for a 30-year fixed-rate mortgage sat at 3.79 percent last week.

"This is the first time we've had back-to-back price increases from a year earlier since June and July of 2010 when the gains were less than 1 percent," Yun said of median existing-home prices, which exclude foreclosure prices and new home prices. "For the year, we're looking for a modest overall price gain of 1.0 to 2.0 percent, with stronger improvement in 2013."

The bullish report comes on the heels of other positive data releases for the housing market: homebuilder confidence jumped to a five-year high in May, and housing starts were 23.7 percent above the April 2011 estimate.

Despite green shoots sprouting in the real estate market, experts say banks' unwillingness to loosen their grip on credit continues to prohibit many homebuyers from capitalizing on once-in-a-lifetime buying conditions.

See also:
Senator's Mortgage Trouble Highlights Positive Housing Trend

States Tighten Foreclosure Regulations
Mortgage Points: When It's Smart to Pay More Upfront

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