Existing home sales, mortgage applications show increases as housing market struggles

“With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain — primarily because some buyers are finding it too difficult to obtain a mortgage,” he said. “For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows.”

Foreclosures and short sales, when the lender takes less than is owed on a property, accounted for 40 percent of all sales last month.

Cash sales hit a record-high 35 percent share, up from 27 percent last March. Sales among first-time homebuyers fell to 33 percent, down from 44 percent a year ago as investors took advantage of falling prices. 

Investors accounted for 22 percent of sales in March, up from 19 percent in February and 19 percent in March 2010, with the balance of sales to repeat buyers, NAR said.

The national median existing-home price for all housing types was $159,600 in March, down 5.9 percent from March 2010. 

Meanwhile, mortgage applications increased 5.3 percent for the week ending April 15, the Mortgage Bankers Association (MBA) said Wednesday.

The refinance index increased 2.7 percent from the previous week, and the purchase index increased 10 percent to its highest level since December 3, 2010, driven largely by a 17.6 percent increase in government purchase applications, MBA said. 

“Borrowers were likely motivated to apply for loans before the scheduled increase in FHA insurance premiums,” “said Michael Fratantoni, MBA’s vice president of research and economics. 

Yun noted that while sales are improving without a federal stimulus, the pace would be “notably stronger” if home-loan practices would “return to the normal, safe standards that were in place a decade ago — before the loose lending practices that created the unprecedented boom and bust cycle.”

“Given that FHA and VA government-backed loan programs turned a modest profit over to the U.S. Treasury last year, and have never required a taxpayer bailout, we believe low-downpayment loans should continue to be available for those consumers who have demonstrated financial responsibility and are willing to stay well within their budget,” he said. “Raising the downpayment requirement would unnecessarily deny credit to many worthy middle-class families and veterans.”

Despite the positive numbers, new home construction showed a 7.2 percent increase in March, according to Commerce Department figures released Tuesday. The housing market continues to struggle as the job market improves, mortgage rates fluctuate, prices fall, inventory increases and the sector sheds millions of foreclosures. 

Total housing inventory at the end of March rose 1.5 percent to 3.55 million existing homes available for sale, an 8.4-month supply at the current sales pace, compared with 8.5 months in February.

Foreclosures slowed in the first quarter because of a backlog in paperwork spurred by an industry-wide investigation into the repossession process, and are expected to rise 20 percent this year. Prices could hit rock bottom this spring.

The average interest rate for 30-year fixed-rate mortgages decreased to 4.83 percent from 4.98 percent, while the interest rate for 15-year fixed-rate mortgages decreased to 4.07 percent from 4.17 percent.

The four-week moving average for applications, which is a less volatile measure of activity, decreased 2.9 percent, while it increased 2.5 percent for purchases and decreased 5.7 percent for refinancing. 

The refinance share of mortgage activity decreased to 58.5 percent of total applications from 60.3 percent the previous week, the lowest refinance share since May 7, 2010. 

Single-family home sales rose 4 percent, 6.5 percent below the same level in March 2010, while the median price fell to $160,500, down 5.3 percent from a year ago.

Existing condominium and co-op sales increased 1.6 percent in March and are 4.1 percent below last year’s level. The median existing condo price was $153,100 in March, which is 10.1 percent below a year ago.

Regionally, existing-home sales in the Northeast rose 3.9 percent, went up 1 percent in the Midwest, increased 8.2 percent in the South and slipped 0.8 percent in the West.