NAR: Existing-Home Sales Up, But HVCC Continues To Hurt Sales

ng-home sales rose for the third consecutive month, with inventory easing and home prices declining less sharply in June, according to the National Association of Realtors (NAR). Existing-home sales increased 3.6% to a seasonally adjusted annual rate of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2% lower than the 4.90 million-unit level in June 2008. "The increase in existing-home sales occurred in all major regions of the country," notes NAR's chief economist, Lawrence Yun. "We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions." In announcing June's numbers, NAR continued its focus on transactions lost or delayed by the Home Valuation Code of Conduct (HVCC). A June survey of NAR members shows 37% experienced at least one lost sale as a result of the new appraisal code, with seven out of 10 reporting an increased use of out-of-area appraisers. Seventy percent of NAR appraiser members said consumers were paying higher fees, while 85% report a perceived reduction in appraisal quality. "Clearly, the process needs to be revised, but the most logical approach is to use appraisers with local expertise, industry designations and access to local data who make a physical examination of the property and use apples-to-apples comparisons with nearby home sales," Yun says. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.42% in June from 4.86% in May; the rate was 6.32% in June 2008. Mortgage interest rates have trended lower in recent weeks. Total housing inventory at the end of June fell 0.7% to 3.82 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, down from a 9.8-month supply in May. Raw inventory totals are 14.9% below those from a year ago, NAR says. "This is another hopeful sign – if we can keep the volume of sales above the level of new inventory, prices could stabilize in many areas around the end of the year," Yun adds. An NAR practitioner survey in June showed first-time buyers accounted for 29% of transactions, unchanged from May, and that the number of buyers looking at homes is up nearly 12 percentage points from June 2008. The national median existing-home price for all housing types was $181,800 in June, which is 15.4% below the June 2008 median. Distressed properties, which accounted for 31% of sales in June, continue to downwardly distort the median price. Single-family home sales rose 2.4% to a seasonally adjusted annual rate of 4.32 million in June from a level of 4.22 million in May. The median price for such properties was $181,600 in June. Existing condominium and co-op sales jumped 14% to a seasonally adjusted annual rate of 570,000 units in June from 500,000 in May, but are 3.1% below the 588,000-unit level in June 2008. Regionally, existing-home sales rose 2.5% in the Northeast, 0.9% in the Midwest, 4% in the South and 6.4% in the West. SOUR

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