By Kevin Chiu
Prompted by the federal home buyer tax credit, low mortgage rates and lower home prices home re-sales rose 6.8% in March after three straight months of declines, according to the National Association of Realtors. The rise in sales demonstrates a stronger housing market moving into the historically most active season of the year.
Existing home sales, including single family homes, condominiums, townhouses and co-ops hit a seasonally adjusted 5.35 million units.
The increase shows that efforts made by the Obama administration with a series of programs to re-ignite the housing market are working, according to Housing Predictor analysts. However, a series of pitfalls lie ahead for the housing market, including the expiration of the federal tax credit at the end of the month and rising foreclosures.
The rise in sales represents the beginning of a broad recovery in almost every part of the country. Home price increases, however, remain to lag in the majority of the nation except some of the hardest hit markets, including areas of California and Florida, two of the most heavily damaged. NAR officials say the national median home price was $170,700 sold in March, a slight 0.4% increase over March, 2009.
Foreclosures and bank assisted short sales, in which lenders cooperate with mortgage holders to reduce the amount owed on a mortgage accounted for 35% of sales. NAR figures do not include sales made directly by banks, many auction companies and private sales, which account for a growing number of home sales nationally.
The median prices paid for a home in the West was down 7.9% from year ago levels, according to the NAR even though sales rose nearly 7% for the month. The median price, the half way point for the price of all homes sold reached $209,400.
In the South, which has gained population at historic levels over the past five years existing sales rose 7.1%. The median price shot up 5.2% from a year ago to $154,800.
However, the Northeastern corridor of the country represented the highest increase in sales volume to an annual rate of 890,000 units in March, some 25.4% higher than a year ago. The median price also rose to $249,800, nearly 9% higher for the year.
The Mid-West, however, continues to lag the nation in terms of recovering from the housing downturn. The median price rose just 0.2% over a year ago at $139,300. Existing sales were higher by 15.5% for the year.