Short Sales, NFIP Interruption Delaying Sales

Posted by Orb Staff on June 22, 2010 No Comments
Categories : Residential Mortgage

ng-home sales were at a seasonally adjusted annual rate of 5.66 million units in May – down 2.2% from an upwardly revised surge of 5.79 million units in April, the National Association of Realtors (NAR) reports. May closings are 19.2% above the 4.75 million-unit level in May 2009; April sales were revised to show an 8% monthly gain. Lawrence Yun, NAR's chief economist, expects one more month of elevated home sales resulting from the home buyer tax credit. "We are witnessing the ongoing effects of the home buyer tax credit, which we'll also see in June real estate closings," he says. "However, approximately 180,000 home buyers who signed a contract in good faith to receive the tax credit may not be able to finalize by the end of June due to delays in the mortgage process, particularly for short sales. "In addition, many potential sales are being delayed by an interruption in the National Flood Insurance Program (NFIP). Florida and Louisiana, also impacted by the oil spill, have the highest percentage of homes that require flood insurance." The NAR is supporting Senate amendments to extend the home buyer tax credit closing deadline through Sept. 30 for contracts written by April 30, and to renew the NFIP. "Sales and related local economic activity would have been higher without delays in the closing process or flood insurance issues," Yun says. SOURCE: [link=http://www.realtor.org/press_room/news_releases/2010/06/may_strong_pace]National Association of Realtors

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