The housing market's recovery remains strong. For the second straight month, more than 4.5 million homes were sold on a seasonally-adjusted, annualized basis.
Low mortgage rates and affordable homes are propelling the home sales ahead in 2012.
According to the National Association of REALTORS®, home resales slipped one percent in February after an upward revision to January's statistics. The Existing Home Sales report showed sales of existing homes up nearly 9% from last year.
An "existing home" is a home that cannot be considered new construction.
In addition, the national home supply now stands at 6.4 months.
"Home supply" is the amount of time it would take, at the current sales pace, for the complete U.S. housing inventory to "sell out". As recently as last summer, home supply was 9-plus months.
When home supply reads "6.0", it's considered a market in balance.
There are two compelling reasons for home buyers and sellers -- from Orange County, California to South Orange, New Jersey -- to get excited about the February Existing Home Sales report.
The first is that home sales remain high despite 3 in 10 purchase contracts "failing".
A contract failure is when a home under contract fails to close for a given reason, often either the buyer couldn't secure mortgage financing in time for the mortgage contingency period; or, the home failed to appraise at its purchase price and the buyer and seller could not agree on a new sales price; or the home failed its inspection with severe defects noted.
February's failure rate was three times the historical average.
Another reason to get excited about the February Existing Home Sales report is that it shows real estate investors accounting for 23% of all home resales.
Investors are an important part of today's housing market. They often purchase homes in various forms of distress, including short sales and foreclosures. They often buy with cash, taking "as-is" homes off the market that might otherwise languish for months.
Furthermore, because the 5-10 Properties Program exists for homeowners with more than 4 financed properties, real estate investors that don't pay cash can buy homes in today's market, too.
It's one reason why home supplies remain low even as banks list more foreclosed homes for sale.
There are currently 2.4 million homes for sale nationwide -- a 19% reduction from a year ago.
If you're buying a home, and whether you want to make a 20 percent downpayment, or as low of a downpayment is possible, it's good time to think of your personal time frame. Home sales are rising, home supplies are falling, and mortgage rates are poised to worsen.
Get a feel for what your monthly housing payment would be if you bought today. The best place to start is with a mortgage rate quote.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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