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A new report by the National Association of Realtors (NAR) found that the sale of previously owned homes fell 0.8 percent in April. April’s numbers brought down the annual sales pace for pre-owned homes to 5.05 million, from 5.09 million in March. Many reports do year-to-year comparisons but that is difficult right now because April and May of last year saw a sales surge in response to the homebuyer tax credit. Comparing April with previous months has still shown that the market is not performing well. The reasons for the decline in April appear to be centered on appraisal issues, as well as higher loan standards.

In a related NAR survey, appraisal problems have shown to be restricting contracts. The survey shows 11 percent of Realtors reported a cancelled contract because an appraisal came in below the buyer’s and seller’s negotiated price, ten percent had a contract delayed, and 14 percent said a contract had to be renegotiated to a lower price because of a low appraisal. Receiving a loan has been the other issue. Banks are tightening lending requirements and insisting on larger down payments. Many buyers are holding out from getting a loan, fearing that the market will continue to plummet, which economists say is likely. Even sharp price declines and low mortgages have not been enough of a boost for the struggling market.

 
 

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