More people bought previously occupied homes in January. But the increase was driven by rising foreclosures and all-cash purchases by investors, while the number of first-time buyers shrank, The Associated Press reports.
Prices sank to their lowest levels in nearly nine years, a troubling sign for the struggling housing sector.
In the Hartford area. Realtors recently reported the backlog of unsold houses grew in January while median prices rose.
Nationally, sales of previously occupied homes rose slightly to a seasonally adjusted annual rate of 5.36 million, the National Association of Realtors said Wednesday. That’s up 2.7 percent from 5.22 million in December.
Still, the pace remains far below the 6 million homes a year that economists say represents a healthy market. And the number of first-time home-buyers fell to 29 percent of the market — the lowest percentage of the market in nearly two years. A more healthy level of first-time home-buyers is about 40 percent, according to the trade group.
Foreclosures represented 37 percent of sales in January. All-cash transactions accounted for 32 percent of home sales — twice the rate from two years ago, when the trade group began tracking these deals. In places like Las Vegas and Miami, cash deals represent about half of sales.
Millions of foreclosures have forced down home prices, and more are expected this year. The median price of a home sold in January was $158,800. That’s a decline of 3.7 percent from a year ago and the lowest point since April 2002.
“Home prices continue to languish,” said Steven Wood, chief economist for Insight Economics. “Any recovery will be difficult to sustain given the still-large supplies of homes for sale and distressed properties.”
A major barrier for first-time home-buyers is tighter lending standards adopted since the housing bubble burst. These have made mortgage loans tougher to acquire. Banks are also requiring buyers put down a larger down payment. During the housing boom, buyers could purchase a home with little or no money down.
