DS News - Digital Archives

EXISTING-HOME SALES AT 27-MONTH HIGH IN AUGUST By Mark Lieberman, Economist for the Five Star Institute Existing-home sales rose 7.8 percent to 4.82 million in August—the highest level since May 2010— the National Association of Realtors (NAR) reported. The median price of an existing single- family home in August was $187,400, down $400 from July but up $16,200, or 9.5 percent, from August 2011. Economists expected the sales pace to be 4.55 million. The percentage gain in sales was the stron- gest since last August when sales improved 8.9 percent month-month, the strongest month- month gain of the year. In August 2010, sales were up 8.6 percent month-month, also the strongest monthly gain that year. The year-year gain in the median price in the month-month increase in sales, existing- home sales continued the steady uphill climb from the cyclical trough of 3.39 million in July 2010. In the first eight months of this year, the sales pace averaged 4.575 million compared with 4.251 million in the first eight months of 2011. Regionally, existing-home sales in the August marked the sixth month in a row prices rose on an annual basis. The last time there were six back-to-back monthly price increases from a year earlier was from December 2005 to May 2006, the NAR said. The August increase was the strongest since January 2006 when the median price rose 10.2 percent from a year earlier. Distressed homes—foreclosures and short sales sold at deep discounts—accounted for 22 percent of August sales (12 percent were fore- closures and 10 percent were short sales), down from 24 percent in July and 31 percent in August 2011. Foreclosures sold for an average discount of 19 percent below market value in August while short sales were discounted 13 percent. Even with the improvement in the sales rate, Lawrence Yun, NAR's chief economist, said the sales pace was below expectation. "The strengthening housing market is occurring even with difficult mortgage qualifying conditions, which is testament to the sizable stored-up housing demand that accumulated in the past five years," Yun said. The inventory of homes for sale rose to 2.47 million in August, up from 2.4 million and down 18.2 percent from 3.02 million in 26 August 2011. With the month-month increase in the sales pace, the months' supply of exist- ing homes on the market dipped to 6.1 months, the lowest level since January when it was 6.0 and well below the cyclical peak of 12.4 months in July 2010. The average months' supply is 6.5 months. With OFFICIALS RECAP YEAR-LONG EFFORT OF DISTRESSED HOMEOWNER INITIATIVE October the results of the Distressed Home- owner Initiative, the first nationwide effort focusing on fraud schemes that target struggling homeowners. Led by members of the Mortgage Fraud Working Group of the Financial Fraud Enforcement Task Force, which explores issues related to mortgage and subprime lending fraud, the initiative spanned from October 1, 2011, to September 30, 2012. Federal officials revealed the efforts led to Federal officials jointly announced in 530 criminal defendants charged (including 172 executives) in 285 federal criminal indictments or informations filed throughout the United States. The criminal cases involved more than 73,000 homeowner victims, and law enforcement estimated losses exceeded $1 billion. Attorney General Eric Holder, HUD Secretary Shaun Donovan, FBI Associate Deputy Director Kevin L. Perkins, and Federal Trade Commission (FTC) Chairman Jon Leibowitz made the joint announcement, the Justice Department stated in a release. "With actions like those announced today, Northeast rose 8.6 percent in August to an annualized rate of 630,000—8.6 percent above August 2011. The median price in the Northeast was $249,200, down from $254,200 in July but up $1,500 from August 2011. Existing-home sales in the Midwest increased 7.7 percent in August to a pace of 1.12 million and are 17.9 percent higher than a year ago. The median price in the Midwest was $152,400, down $1,300 from July but up $11,000 from August 2011. In the South, existing-home sales rose 7.3 we send a very clear message: if you don't operate ethically, transparently, and within the boundaries of the law, we will not hesitate to act," Donovan said in a statement. Perkins, added, "We recognize the negative percent to an annual level of 1.9 million in August and 11.1 percent above August 2011. The median price in the region was $160,100, down $600 from July but up $9,800 in the last year. Existing-home sales in the West rose 8.3 percent to 1.17 million in August, unchanged from a year ago. The median price in the West was $242,000, up $800 from July and $33,900 from August 2011. The sales increase came the month that the impact that mortgage fraud and foreclosures have on our economy and on our communities. We cannot merely investigate after the fact. We must use intelligence and sophisticated techniques to identify and stop those who seek to defraud American homeowners. We will continue to work with our partners across the country to ensure the integrity of the housing market and to keep our communities safe." In addition, the Justice Department, Federal Trade Commission, the Consumer Financial Protection Bureau (CFPB), and other groups filed 110 federal civil cases against 153 defendants. In those cases, officials identified 15,000 victims and estimated losses of more than $37 million. Efforts were also made to prevent strug- Bureau of Labor Statistics reported the number of real estate jobs fell 5,200 and the number of underwriting jobs dropped 1,100. NAR's report tracks closed transactions, reflecting economic conditions two months earlier, in June, when the unemployment rate was 8.2 percent. gling homeowners from becoming victims of fraud. Together, the Treasury Department and SIGTARP shut down or forced into compliance more than 900 websites and web advertisers considered confusing or fraudulent. Accord- ing to the release, the websites displayed the Treasury Seal and key TARP housing program names to deceive homeowners. When combining the total efforts of federal and state officials working both criminal and civil cases, the initiative has identified and as- sisted more than 91,000 victims.

• Cover