Despite extremely low interest rates, housing sales remain anemic

By: Cynthia Sparagna

Although home sales still remain subpar, there is a some good news in today’s real estate market. Existing home sales rose in August 2010 following a substantial correction in July, said the National Association of Realtors. Completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6% to a seasonally adjusted rate of 4.13 million in August. Sales, however, still remain 19% below the 5.10 milllion-unit pace in August 2009.

Freddie Mac recently reported that the average commitment rate for a 30-year fixed-rate mortgage fell to 4.43% in August, down from 5.19% in August 2009. The national median existing-home price for all housing types was $178,600 in August, up 0.8% from a year ago. Distressed homes rose to 34% of sales in August from 32% in July; they were 31% in August 2009.

Overall, NAR President Vicki Cox Golder, sympathizes with consumers. “People understand the good affordability conditions with stable home prices in most areas, but they’re concerned about the economy and speculation on Wall Street,” she said. “We need to stick with the facts about the long-term value of home ownership and avoid unrealistic assessments. Tight credit and slow short sales are ongoing problems—expediting short sales will help the market recover more quickly.”

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