Housing Affordability Continues To Improve

Washington, DC, Feb. 9, 2012 -- Housing affordability conditions improved in most metropolitan areas, according to the latest quarterly report by the National Association of Realtors.

Introduced with this report is a new annual metro-level housing affordability index, with historically favorable conditions dominating across the country.

The median existing single-family home price rose in 29 out of 149 metropolitan statistical areas in the fourth quarter from a year earlier; two were unchanged and 118 areas had price declines.

Lawrence Yun, NAR chief economist, said the figures reflect greater home sales activity at lower price points.

“Sales have risen strongly in lower price ranges from one year ago, while sales at the upper end remain sluggish,” he said.

“More importantly, we’re seeing a consistent trend of declining inventory, which means supply and demand conditions are becoming more balanced in more areas, which will help stabilize home prices.”

The national median existing single-family home price was $163,500 in the fourth quarter, down 4.2% from $170,600 in the fourth quarter of 2010.

Distressed homes – foreclosures and short sales which sold at discounts averaging 15 to 20% – accounted for 30% of fourth quarter sales; they were 34% a year earlier.

“Broadly speaking, the very middle of the country, from the Dakotas and Nebraska to Oklahoma and Texas, has experienced very stable home price trends because of stronger job creation in those areas,” Yun said.

Total existing-home sales, including single-family and condo, increased 5.9% to a seasonally adjusted annual rate of 4.42 million in the fourth quarter from 4.17 million in the third quarter, and were 9.2% above the 4.04 million pace during the fourth quarter of 2010. All regions rose from the third quarter and from a year ago.

At the end of the fourth quarter there were 2.38 million existing homes available for sale, which is 21.2% lower than the close of the fourth quarter of 2010 when there were 3.02 million homes on the market.