Signs of Recovery Despite Financing Hurdles

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.

You can view his press conference in the 4-minute video above.

Robert Freedman

Robert Freedman is director of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at

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  1. Hillary Maurer

    I am not a realtor but I came to this site to try to find out if the NAR is advocating for restructuring (and continuing the low interest rates for) student loans. Have you worked out the economic impact that affordable student loan payments would have on the ability of younger people to own their own homes?

  2. Robert Freedman

    Thanks for your question. It’s an issue that housing advocates are talking about increasingly. Let me refer you to something prepared on that by the National Association of Home Builders.

  3. and the mortgage rates keep dropping!

  4. kbynam

    The signs of recovery are fraudulant. Properties owned by the banks are coming on the market with unethical expectations. They are asking for highest and best. They are expecting buyers to waive appraisal contingencies because many times the properties aren’t appraising. The buyer has to come out of pocket for the bridge, between contract price and appraisal price, or loose their deposits. Its just a matter of time before this bubble burst and the crap hits the fan.
    Realtors will be first in line to take the fall. Appraisers this time around are smart and cautious.
    The properties aren’t appraising yet the prices are appearing to be rising. If someone would take the time to find out what the property actually appraised for, the figures will not be so great.