Existing-home sales up 3.7% in March
Existing-home sales rose 3.7% between February and March, but still remain below year-ago levels as consumers struggle to obtain mortgage financing, the National Association of Realtors said Wednesday. In the past eight months, existing-home sales rose six times, suggesting a recovery is under way in the housing market, NAR President Lawrence Yun said. Existing-home sales in March hit a seasonally adjusted annual rate of 5.10 million, up from a revised figure of 4.92 million in February, but still 6.3% below the 5.44 million pace set in March of 2010. The drop from last year is partly attributed to the expiration of the homebuyer tax credit, which encouraged buyers to jump into the market. “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 Yun. However, the homebuyers joining the market are enjoying record-low mortgage rates. NAR's home affordability index shows the monthly mortgage principal and interest payment on a median-priced home is only 13% of gross household income, the lowest level since 1970. NAR asserted that it wants a return to conservative, responsible lending, but is against turning away from certain government-backed mortgages. “Given that FHA (Federal Housing Administration) and VA (Veterans Affairs) 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 down payment loans should continue to be available for those consumers who have demonstrated financial responsibility and are willing to stay well within their budget," Yun said. Write to Kerri Panchuk.