A housing report released in February disappointed many, as sales on existing homes dipped last month. Economists were disappointed by the nearly 1% drop. The recent drop shows that even though the housing market’s bubble burst over five years ago, the road forward will be full of bumps. A number of analysts thought that due to mortgage rates being near all time lows and the improving job market; previously owned home sales would increase.
The seasonally adjusted rate for annual sales was at 4.59 million. That compared to January’s adjusted rate of 4.63 million, according to the National Association of Realtors monthly report. A large number of homeowners are under water; they owe more on their mortgage than their home is worth. This type of mortgage is at its highest since 2009. There are over 11 million home mortgages underwater. That represents almost 23% of the total mortgages.
Nevertheless, sales were nearly 9% higher than a year ago. The national average for existing homes was $156,000, which was an increase of 0.3% from last February. Some economists are upbeat about those figures, saying it points to the housing market stabilizing, compared to last year when there were steep price drops.
Mortgage rates remain very low. The 30-year fixed rate national average was just 3.89% in February. However, foreclosures are dragging down the market. Close to 1/3 of all existing home sales were either a short sale or foreclosure in February.
