Economy Watch: Existing Home Sales Trend Upward
- Oct 26, 2010
October 26, 2010
By Dees Stribling, Contributing Editor
Existing home sales went from bad to a little less bad in September, according to the National Association of Realtors. Sales of single-family, townhomes, condos and co-ops increased 10 percent to an annualized rate of 4.53 million from a downwardly revised 4.12 million in August. Sales in September 2010 were 19.1 percent lower than in September 2009, back in the early days of the federal homebuyer tax credit.
Distressed homes accounted for 35 percent of sales in September, compared with 34 percent in August; they were 29 percent in September 2009. The most recent numbers were tabulated just before the term “robo-signing” entered the real estate lexicon. The impact of the foreclosure fiasco is still unclear, but next month’s numbers from NAR regarding distressed home sales might offer some clues. The national median existing-home price for all housing types was $171,700 in September 2010, 2.4 percent less than during the same month a year ago.
“A housing recovery is taking place but will be choppy at times, depending on the duration and impact of a foreclosure moratorium,” noted NAR chief economist Lawrence Yun in a statement. “But the overall direction should be a gradual rising trend in home sales.”
Bernanke’s Take on the Foreclosure
Speaking at Federal Reserve System and Federal Deposit Insurance Corp. Conference on Mortgage Foreclosures and the Future of Housing in Arlington, Va., on Monday, Fed chairman Ben Bernanke could hardly avoid the subject of the foreclosure mess. The chairman did not, naturally, use that term or “robo-signing” or any variation of them, since they are too colorful for bankers, much less central bankers.
He did say, however, that “we have been concerned about reported irregularities in foreclosure practices at a number of large financial institutions… We take violations of proper procedures seriously. We anticipate preliminary results of the review next month. In addition, Federal Reserve staff members and their counterparts at other federal agencies are evaluating the potential effects of these problems on the real estate market and financial institutions.”
During the speech he also touted a Fed initiative called Mortgage Outreach and Research Effort, otherwise known as MORE. It involves organizing events; providing information to policymakers, community organizations, financial institutions and the public at large; undertaking studies of the foreclosure problem; and even the publication of a “Foreclosure Recovery Resource Guide, “which helps consumers recover from the foreclosure process.” Whatever else comes of MORE, it confirms that this isn’t your father’s Fed any more.
HAMP Slammed By TARP Special Inspector
On Monday the Special Inspector General for the Troubled Asset Relief Plan issued a report highly critical of the U.S. Treasury Department, essentially calling its Home Affordable Modification Program a failure. HAMP, the reported noted, isn’t “preserving home ownership.” That would indeed be the definition of failure in this case.
“As a result, a program that began with much promise now must be counted among those that risk generating public anger and mistrust,” the report added dourly. Numbers seem to be on its side. As of the end of September, about 467,000 homeowners have received permanent modifications of their mortgages. Some 5.5 million homeowners have received foreclosure filings since January 2009.
Wall Street seemed to heed Chairman Bernanke’s words on Monday, and experienced an upward bounce. The Dow Jones Industrial Average was up 31.49 points, or 0.28 percent, while the S&P 500 gained 0.21 percent and the Nasdaq advanced 0.46 percent.