Housing Perspective: May Existing Home Sales
Home sales in May rose from April, the second straightly monthly increase. According to the National Association of Realtors, or NAR, purchases crept up 2.4% from the prior month, which was less than 3.0% analysis were expecting.
Prices continued their decline, falling 17% from a year ago, dragged down by distressed sales.
As readers of this site know, we rarely have much good to say about the NAR. They are a lobbyist group, plain and simple, and typically put the interests of their constituents (Realtors) above that of buyers and sellers. But this month, the NAR hit the nail on the head with respect to the current home buying environment:
“The increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan,” and “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales.”
Bingo. The new appraisal rules are wreaking havoc in the mortgage market, with loans disastrously hard to get thanks to inept appraisers and appraisal management companies. Coupled with rising interest rates, this does not bode well for the nascent housing “recovery.”
Tags: appraisers, mortgage, NAR, sales