Home Prices Fell 6.6 Percent in 1Q
|May 16, 2007|
By Alan Zibel
Sales of existing homes nationwide are on track to hit 6.4 million this year, a decline of 6.6 percent from a year ago, the National Association of Realtors said Tuesday in the latest indication of the housing market's slowdown.
The report came on the same day as industry research firm RealtyTrac Inc. reported that mortgage lenders in April foreclosed on 62 percent more U.S. homes than a year ago as borrowers failed to keep up with loan payments.
In the realtors' trade group's quarterly survey of housing market conditions, the national median existing single-family home price in the first quarter was $212,300, down 1.8 percent from a year ago when the median price was $216,100.
'It appears the worst of the price correction is behind us,' said Pat V. Combs, NAR's president and vice president of Coldwell Banker-AJS-Schmidt in Grand Rapids, Mich, in a prepared statement.
Existing home sales were 2.4 percent higher at an annual rate than they were in the last quarter of 2006.
Fourteen states and the District of Columbia showed an increase in the rate of home sales last quarter compared to only six states showing gains a quarter earlier.
The median is a typical market price where half the homes sold for more and half the homes sold for less.
At least part of the decline in the median prices of homes in the United States is because sales have shifted away from more expensive homes, the NAR said.
Regionally, existing home sales took the biggest hit in the West, where the sales pace fell 11.9 percent to an annual rate of 1.3 million units and the median home price was 1.8 percent below a year ago at $336,200.
Existing home sales in the South fell 7.3 percent to an annual rate of 2.5 million units and the median home price was $177,800, just 0.6 percent below a year ago.
In the Midwest, existing home sales fell 6.1 percent to a pace of 1.5 million units. The median single-family home price was $154,600, down 2.8 percent from a year earlier.
The Northeast fared the best with sales rising at a 1.2 percent annual rate to 1.1 million units last quarter with a median price of $268,900, down 2.5 percent from a year ago.
In its report, Irvine, Calif-based RealtyTrac said foreclosures in April spiked to 147,708, compared with 91,168 in 2006, as lenders repossessed one out of every 783 homes. The April figure was down 1 percent from March, when foreclosures hit a two-year high.
Nevada, Colorado, Connecticut, California and Ohio posted the top foreclosure rates nationwide, RealtyTrac said.
'We expect foreclosure activity to at least stay above last year's levels for the remainder of 2007, fueled by a combustible mix of risky loans taken out in the last few years _ many in the subprime market _ and slowing home price appreciation,' James Saccacio, chief executive officer of Irvine, Calif.-based RealtyTrac, said in a prepared statement.
Foreclosures _ defined by RealtyTrac as default notices, auction sale notices and bank repossessions _ have been rising nationwide due to loans given to people with shaky credit. Many so-called subprime borrowers during the housing boom took out adjustable-rate mortgages, which are beginning to reset at higher rates.
Many subprime borrowers are unable to meet higher payments and are unable to sell their homes as housing prices slump.
Coopyright 2007 Associated Press