By Mike Colpitts
Home sales fell in June for the second straight month on the heels of the federal home buyers’ tax credit expiration, signaling the housing market is still in a national downturn, according to the National Association of Realtors.
The fall in sales gives further corroboration to a second dip in the housing market with unemployment at 9.5% nationally, and the real unemployment rate counting those who have given up on looking for a job much higher. The rise in home sales stimulated by the federal tax credit worked to increase sales, but has lost most of its punch.
However, a rise in mortgage applications for new home purchases and refinancing reported by the Mortgage Bankers association just yesterday for the previous week demonstrates more of a mixed picture for the market.
The sales of existing homes slowed 5.1% for the month to a seasonally adjusted rate of 5.37-million units in June, but are still higher for the year compared to last year. “June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months,” said Lawrence Yun, NAR chief economist.
The association’s economist is saying something that Housing Predictor forecasters have been indicating for more than two years, ever since the housing market took a disastrous turn with record foreclosures. “Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels,” said Yun.
NAR statistics do not include homes privately sold by owners to parties without real estate agent services, through many online companies and auctioned-off by organizations not connected with the association, which has the largest number of members for any special interest in the nation.
Record low mortgage rates are apparently not enough to increase home buyer interest in the market as average home values in the over-whelming majority of the country fall, according to the on-going Housing Predictor survey.
However, the NAR says the “median” existing home price for all housing types, including single family homes, condos and townhouses was $183,700 in June, 1% higher than a year ago. Distressed homes, including foreclosures accounted for 32% of all Realtor assisted sales. The figure was just one-percent higher over the previous two months.
Growing evidence suggests banks are finally beginning to work more cooperatively with homeowners at risk of foreclosure to cut the amount due on a mortgage in short sales. Tracking figures indicate foreclosure notices have slowed in recent months, but formal repossessions on properties have increased.