Metro Home Sales Continue Well Above 2014

New mortgage rules, effective this month, may squeeze home sales nationally, reported the Wall Street today, just as the Greater Albuquerque Association of Realtors issued the September sales report. In theory the new rules are supposed to make it easier to understand mortgage terms. But, following the rule about never being able to do just one thing, other pieces of the mortgage process have changed with possible negative effects.
Other proposed federal rules have driven some big lenders from the mortgage business. J.P. Morgan has mostly dropped FHA lending, which will hurt first-time and credit-poor buyers. Wells Fargo will raise its minimum credit score from 600 to 640.
In metro Albuquerque during September, closed sales of single family detached homes dropped 62 units, or 7%, from August. Pending sales dropped 8%, or 87 units, from August. The changes appear to be seasonal as sales slow during the fall from the summer.
Closed sales were 886 homes during September. Pending sales were 1,000 homes. September closed sales were 82% of the 1,087 sales that were pending during August.
The home that closed sales were on the market an average of 57 days, the fourth consecutive month under 60 days.
The September sales performance remained well ahead of 2014. Closed sales increased 26% from September 2014 with pending sales up 17%.
The average sales price for September, $224,353, was the third highest of 2015, but just a whisker behind June and August which both were just over $226,000. The average sales price appears to have gotten a boost from strong sales in the higher price categories, those including homes priced at more than $250,000.
However, the median price, $180,850, was down $9,100, or 5% from August, and was the third lowest price since May. Even so, the September median was up 3.3% from a year ago.
The absorption rate dropped to 4.87 months for September, meaning that it would take 4.87 months to sell the metro’s current inventory of homes. A six-month supply is the traditional definition of an average market, GAAR says. The absorption rate has been below six months since December 2014.