Real Estate Market

Home sales continue to bomb

6/23/10 - With the housing market a cornerstone of the economy, the economy is standing on shaky ground and record low mortgage rates aren't helping shore things up.

From April to May this year, new-home sales crashed nearly 33 percent, tumbling to a record low annual sales pace of 300,000 homes, according to the Commerce Departmentthis week.

In May this year, new home sales were down 18.3 percent from May 2009.

Sales of previously owned homes also fell, by 2.2 percent from April to May, the National Association of Realtors also reported this week.

Fortunately, year-over-year existing home sales were up more than 19 percent, NAR reported.

"We are witnessing the ongoing effects of the home buyer tax credit, which we'll also see in June real estate closings," said Lawrence Yun, NAR chief economist.

"However, approximately 180,000 home buyers who signed a contract in good faith to receive the tax credit may not be able to finalize by the end of June due to delays in the mortgage process, particularly for short sales," Yun added.

The median U.S. home price for existing homes in May, $179,600, reflects a nearly 3 percent increase from a year ago, but it remains 22 percent down from the $230,000 median peak set back in July 2006, according to NAR numbers.

NAR said pending home sales are expected to decline notably in May and June from the spring surge. Yun added that job growth and a manageable level of foreclosures are keys to sales and price performance during the second half of the year.

The national rate of unemployment remains near 10 percent and lenders rarely write mortgages for the unemployed.

As the federal home buyer tax credit ended, foreclosures also continued to prey on the market and are expected to reach 1.9 million this year after a record 2 million in 2009 according to Moody's Analytics Inc.

With homes lost to foreclosure and tough lending standards, the rate of homeownership has dwindled to it's lowest level in a decade.

The 67.1 homeownership rate in the first quarter this year was the lowest its been since the first quarter of 2000, according to U.S. Census. The rate peaked at 69.2 percent in the second quarter 2004.

Other government bailouts for homeowners either aren't working or have also expired.

Global rating agency Fitch Ratings recently reported that 65 to 75 percent of mortgage modifications are likely to fail within 12 months, because other debts owed by homeowners remain in place and untouched.

The Federal Reserve, in March, ended it's $1.25 trillion program to buy mortgage-backed securities. The program is credited with helping push the average U.S. 30- year fixed-mortgage rate to an all-time low of 4.71 percent in December.

Rates have remained low, but too many other market conditions nullify the potential effect of financing affordability.

And the worst isn't over.

Combined sales of new and existing homes will drop from 7 to 12 percent in the third quarter from the second quarter, according to forecasts by Freddie Mac and Fannie Mae.

Others say they could fall by as much as 17 percent with home values due to suffer another 13 percent hit.

A true, full housing recovery may be a decade away.



Refinance at Today's Low Rates!


Follow the link to continue reading the related articles:

Mortgage rates not low enough for housing consumers

Housing market isn't what it used to be

Zillow: Housing's hard landing due July-September 2010

New home sales nothing to write home about

Fannie Mae & Jumbo Mortgage Rates

Just One Click! = Current Rate Chart

Pennsylvania Mortgage Rates Current Mortgage Rates - Hawaii Current Mortgage Rates - Alaska West Virginia Mortgage Rates Virginia Mortgage Rates District of Columbia Mortgage Rates Maryland Mortgage Rates Delaware Mortgage Rates New Jersey Mortgage Rates Connecticut Mortgage Rates Rhode Island Mortgage Rates Massachusetts Mortgage Rates New Hampshire Mortgage Rates Vermont Mortgage Rates New Hampshire Mortgage Rates Maine Current Mortgage Rates Vermont Mortgage Rates Current Mortgage Rates - New York Current Mortgage Rates - Michigan Current Interest Rates - Wisconsin Current Mortgage Rates - MINNESOTA Ohio Mortgage Rates Current Mortgage Rates - Kentucky Current Mortgage Rates - Indiana Illinois - Current Mortgage Rates Current Mortgage Rates - Iowa Missouri Mortgage Rates Current Mortgage Rates - North Carolina South Carolina Mortgage Rates Current Mortgage Rates - Florida Current Mortgage Rates - Georgia Current Mortgage Rates - Tennessee Current Mortgage Rates - Alabama Current Mortgage Rates - Mississippi Current Mortgage Rates - Louisiana Current Mortgage Rates - Arkansas Current Mortgage Rates - Oklahoma Current Mortgage Rates - TEXAS Current Mortgage Rates - New Mexico Current Mortgage Rates - Arizona Current Mortgage Rates - Kansas Current Mortgage Rates - Nebraska Current Mortgage Rates - Colorado Current Mortgage Rates - Wyoming South Dakota Mortgage Rates Current Mortgage Rates - North Dakota Current Rates - Montana Idaho Current Rates Washington Mortgage Rates Current Mortgage Rates - Oregon Current Mortgage Rates - Utah Current Mortgage Rates - Nevada Current Mortgage Rates - California

Start by selecting your state

Get the Updated and Improved Mortgage Rates App from

iPad for Mortgage Rates

Refinancing: Getting Started

Refinancing Info and Advice

Refinancing: Selecting a Loan

FREE Mortgage Rate Widgets
Your State's Rates or National Rates
Get this Widget for any State you want