Right: First-time homebuyers traditionally make up about 40 percent of the buyer's market. A federal tax credit, implemented in 2008 and expanded in 2009 for first-time buyers, inflated the percentage for those years, but the subsidy's expiration led to a bottoming-out in 2011 that the market is still recovering from.
Summer Slowdown?
New indicators are pointing to another troubled summer for the economy after the first quarter's strong numbers. Employers added a seasonally adjusted 69,000 jobs in May, according to the Labor Department, marking the smallest increase in a year. The unemployment and underemployment rates increased, to 8.2 and 14.8 percent respective- ly, and construction companies cut 28,000 net jobs in May, the most in two years, increasing speculation that the sunny first quarter num- bers (attributed to a warmer winter) may not represent a larger trend. The housing market has shown modest improvements, but faces a long comeback after posting some of the worst numbers on record in 2011.
Existing Home Sales Creep Up
Total existing home sales fell 1.5 percent in May, keeping an annual pace of 4.55 million seasonally adjusted units, down from 4.62 in April but up 9.6 percent from May 2011. The May figure marks the 11th consecutive month of growth over the same month in 2011, according to the National Association of Realtors.
Existing home sales fell slightly in May due to diminishing inventories, but the year-over- year figures still indicate an improving market, said Lawrence Yun, NAR's chief economist. "The recovery is occurring despite excessively tight credit conditions and higher down-pay- ment requirements, which are negating the im- pact of record-high affordability conditions," Yun said. "The slight pullback in monthly home sales is more likely due to supply con- straints rather than softening demand." Existing home sales include completed transactions for single-family homes, town- homes, condominiums and co-ops. The total housing inventory fell 0.4 percent at the end of May to 2.49 million existing homes avail- able, and that figure is down 20.4 percent from a year ago.
Information Request # 365 July 2012 33
NAR 2011 PROFILE OF HOME BUYERS AND SELLERS