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Sales of Existing Houses in Foreclosure Listings Up

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By : John Cutts    99 or more times read
The National Association of Realtors‘ (NAR) Pending Home Sales Index for February of this year increased by 2.1 percent to 82.1 percent from 80.4 percent the previous month.

Regions in the Midwest experienced the highest pending existing home sales in foreclosures listings for the month with 14.5 percent compared with January sales. Meanwhile, regions in the Northeast reported a 10.6 percent growth in pending existing home sales and 4.4 percent rise in the South. A 13.5 percent drop in sales of existing houses in the West was reported.

Lawrence Yun, NAR chief economist, said that the increase in sales of existing houses in foreclosure listings may be a positive indicator that the housing market will experience additional sales gains.

Meanwhile, the Housing Affordability Index (HAI) of NAR soared by 0.9 percent to 173.5 points in February of this year, representing a 36.3 rise from the previous year. NAR’s HAI determines housing affordability by incorporating the relationship between mortgage interest rates, family income and home prices.

According to NAR, the national median earning of $59,700 can allow a family to afford a property valued at $285,600. This is assuming that the family allocates not over 25 percent of their gross earning to mortgage interest and principal.

An existing single-family house has a national median price of $164,600.

Yun expected that the sales of existing houses in foreclosure listings would peak in the last half of this year and first-time homebuyers would absorb most of excess inventory in the housing market.

He pointed out that the drop in median home prices was influenced by distressed foreclosure listings sales in states severely affected by foreclosures, including Nevada, California and Florida.

On the other hand, sales of homes in foreclosure listings surged by 5 percent last month, compared with figures for the same month the previous year.

Yearly comparison of sales of homes in foreclosure listings showed that the Northeast region gained 16 percent, 6 percent in the South and 3 percent in Western states.

Meanwhile, sales of condominiums across the United States rose by 11.4 percent, way ahead of the 4.4 percent sales increase for detached single family houses.

In South Florida, where foreclosure rate is at an all-time high, sales for detached houses went up by 68 percent and 71 percent for condominiums.

Coldwell-Banker Vice President Charles Richardson believed that the sales increase would hasten the recovery of the housing market.

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