Signs continue to come in that the housing market is seeing slow but steady improvement, although overly tight lending standards continue to hold back the market given the amount of pent-up demand that’s out there.
Existing-home sales increased 2.3 percent in July from a month earlier to a sales pace of 4.47 million. The new pace is more than 10 percent above where it was at this time last year.
And the median home sales price is up significantly as well, to $187,300, or 9.4 percent higher than this time last year, although NAR Chief Economist Lawrence Yun in his monthly press conference in Washington yesterday attributed the gain to an increase in sales of high-cost homes. Sales of homes at the $100,000 or less price point declined nationally, reflecting the continuing shortgage of distressed and other inventory in markets around the country.
The trend is in the right direction, and given the constraint buyers face in obtaining financing, the growth in volume and in price is encouraging. But the picture could be considerably brighter, Yun thinks, if lenders returned to more normal underwriting standards–that is, standards that were in place for years prior to their loosening in the housing bubble years. As it stands, lenders have tightened way too much in response to the market excesses several years ago.
“Housing could easily be much stronger without these abnormal frictions.” he said in his statement released with the latest sales figures yesterday.