Home sales rise again

Washington Business Journal - by Jeff Clabaugh Staff Reporter
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Sales of existing homes rose for the second straight month in May, signaling low prices and incentives are attracting buyers.

The National Association of Realtors says existing home sales, including single-family homes, condos and coops, rose 2.4 percent in May. It was the first back-to-back monthly gain in existing home sales since September 2005.

“Historically low mortgage rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates,” said NAR chief economist Lawrence Yun. “First time buyers are also being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory.”

The numbers could be even better, if it weren’t for poor appraisals, says the Realtors association. While pending sales of existing homes - those with signed contracts but not closed - indicate stronger activity, some contracts are falling through from faulty valuations that keep buyers from getting a loan, said Yun.

The NAR calls the appraisal problem serious, and says complaints about faulty appraisals have been snowballing across the country.

First time buyers accounted for 29 percent of sales in May. The number of buyers actively looking is up almost 10 percent from a year ago.

Condominium and cooperative sales saw the biggest gain in May, up 6.1 percent from April.