More Encouraging Housing News

April 20, 2011

It’s been a good week to be a real estate reporter.

Earlier today, we provided some positive news about the local industry in:

Chicago Real Estate Market Showing Signs of Spring

Yesterday, the good news involved newly built homes in:

New-Home Construction on the Rise

Now, there is encouraging news to report on the national real estate front.

According to the National Association of REALTORS®, existing-home sales in March increased for the sixth time over the past eight months.

The sale of existing homes rose 3.7 percent to a seasonally adjusted annual rate of 5.10 million last month from a revised 4.92 million in February.

home with sold sign in front of it.That puts sales at a mere 6.4 percent below the pace in March 2010, and that was a month that saw elevated activity due to the Federal Home Buyer Tax Credit.

“With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain — primarily because some buyers are finding it too difficult to obtain a mortgage,” said Lawrence Yun, NAR chief economist.

“For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows.”

NAR’s housing affordability index shows that the typical monthly mortgage payment on the purchase of a median-priced existing home, including principal and interest, is only 13 percent of a gross household income. That’s the lowest since records began in 1970.

In other words, now is the time to buy a home — if you can get a mortgage.

“Although home sales are coming back without a federal stimulus, sales would be notably stronger if mortgage lending would return to the normal, safe standards that were in place a decade ago – before the loose lending practices that created the unprecedented boom and bust cycle,” said Yun.

“Given that FHA and VA government-backed loan programs turned a modest profit over to the U.S. Treasury last year, and have never required a taxpayer bailout, we believe low-downpayment loans should continue to be available for those consumers who have demonstrated financial responsibility and are willing to stay well within their budget.”

Other interesting NAR findings for March:

*First-time home buyers bought 33 percent of homes.

*All-cash sales were at a record market share of 35 percent.

*Investors invested in 22 percent of the sales.

*Distressed homes accounted for a 40 percent market share.

*The total housing inventory rose 1.5 percent to 3.55 million existing homes for sale.

That’s a lot of homes from which to choose. And, as rents continue to go up, home ownership still makes sense.

“The typical buyer today plans to stay in a home for 10 years, while rents are projected to rise at faster rates over the next few years,” Ron Phipps, NAR President. “Rents will continue to trend up, especially in comparison with a fixed-rate loan which provides financial stability and gradual accumulation of equity over time.

“As buyers gain more financial security, the advantages of home ownership become more obvious.”

Categories: Economy

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[…] has been plenty of good news this week about the Chicago housing market, and now there’s positive news to report involving the commercial Chicago real estate […]

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