In the ‘up one minute, down the next’ housing market we live in, each week brings new revelations. While existing home sales were improving a week or two ago, they are now declining once more – leading many to wonder which way is really up.
Today The National Association of Realtors reported that existing home sales took a slight tumble in April, after a long, seven-month string of gains. Every region except for the Midwest (which saw a gain of 5.7%) saw decreases in their existing home sales. The Northeast took the largest single drop, falling 7.5% to an astounding 32.1% drop from a year ago.
What is perplexing is that it seems whatever can be done is being done. Interest rates are at historic lows, in the hope that more homebuyers, enticed by relatively-cheap loans, will at the least pick up an existing home sale if not build a new house. However, banks are still tightening their requirements in an effort to prevent what resulted in the housing crash to begin with – numerous amounts of people who were unable to repay their lenders.
NAR President Ron Phipps called for banks to adopt more sensible lending standards to get more quality buyers into homes.
Existing home sales are down not only due to high standards, but also due to continuing unemployment. Even though the country added 244,000 jobs in April – a staggering number relatively speaking – unemployment still remains high for most areas of the country.
Of course, what all of this means for real estate buyers is that a lack of demand will continue to erode home prices- meaning real estate bargains will continue to fall into the laps of any buyer who either can pay in cash or can actually qualify for a loan.
