Mixed signals point to an uneven housing recovery

While the housing market is showing signs of a turnaround, some analysts are referring to the recovery as “uneven.”

As The Wall Street Journal explains in a recent article, “things aren’t getting better rapidly, but we’re also not in the ‘hold-your-hat’ declines of 2010 or the ‘spring that never materialized’ of 2011.”

Several housing reports have shown home sales are up from last year’s levels, but the most recent June housing numbers revealed a slowdown in several parts of the housing market. For example, the National Association of Realtors reported last week that pending home sales dropped in June by 1.4 percent compared to May. However, pending home sales are up nearly 10 percent year-over-year.

NAR also reported that sales of existing homes dropped 5.4 percent in June from May, yet sales are up 4.5 percent year-over-year. And last week, the Commerce Department reported that new-home sales dropped 8.4 percent in June from May, yet new-home sales are still up 15.1 percent over last year’s levels.

Some blame a sagging economic recovery, along with stagnant job and wage growth, for holding back a stronger surge in the real estate market recovery.

While record low mortgage rates are giving a big boost to housing affordability, many home buyers reportedly continue to struggle to obtain financing due to banks’ tighter underwriting standards, some analysts say.

Also, NAR has said that the drop in sales volumes lately has been mostly due to low inventories of for-sale homes on the market. Inventories dropped 24 percent from a year ago, which marks the largest drop in some 30 years.

Despite a June drop in home sales, however, home prices are showing a consistent rebound, posting higher month-over-month and year-over-year increases nationwide.