First quarter results bode well for home sales. Learn more about the latest housing market trends.
The median price of a single- family home dipped 0.4 percent in the first quarter of 2012 compared to the same period last year, though prices rose in 74 out of 146 metropolitan areas, according to data released today by the National Association of Realtors.
The median price for a single family home was $158,100 in the first quarter, down from $158,700 a year earlier, reported NAR. The share of homes sold at deep discounts through foreclosures and short sales fell to 32 percent of first quarter sales, down from 38 percent last year.
Total existing home sales, including townhomes, condominiums and co-ops, increased 4.7 percent to a seasonally adjusted annual rate of 4.57 million. This is 5.3 percent higher than the 4.34 rate for the first quarter of 2011.
“This is the highest first quarter sales pace since 2007,” said Lawrence Yun, chief economist for the association, said in a statement. Yun predicts total home sales could increase 7 percent to 10 percent in 2012.
Inventory of unsold homes has steadily dwindled, said Yun, creating shortages of lower priced homes. In particular, the Western states have a “very tight” supply of homes in the middle price ranges. According to Yun, “This is very good news for many sellers who wish to list now, or for those waiting for prices to improve.”
The number of existing homes available for sale was 2.37 million at the end of the first quarter, a 21.8 percent drop from the same period in 2011. The drop is part of a sustained downward trend since the summer of 2007 when inventories were a record 4.04 million. The rough balance between demand and supply puts sellers on even footing with buyers in most markets, said Moe Veissi, the association’s president, in a statement, while homes remain affordable by historical standards due to a combination of depressed prices and low interest rates.
“Qualifying incomes are well below median incomes in most of the country, which means home buyers generally can stay well within their means,” said Yun. The national median family income was $61,000 in the first quarter, said Yun, but a buyer making a 20 percent down payment would need $29,390 to purchase a home at the median price. A buyer making a 10 percent down payment would need $32,900.
The record affordability continues to attract investors, who accounted for 22 percent of transactions in the first quarter, up from 19 percent in the fourth quarter of 2011 and 21 percent a year ago.