Lawrence Yun, NAR chief economist, expected the sluggish performance.  “As noted last month, temporary mortgage problems were peaking back in August when many of the sales closed in October were being negotiated.  We continue to see the biggest impact in high-cost markets that rely on jumbo loans,” he said.  “Mortgage availability has improved as evidenced by much lower mortgage interest rates and a sharp jump in FHA endorsements for home purchases. 

“A trend away from subprime mortgages to FHA loans, which often carry much lower interest rates, is a positive development for consumers and the housing market going forward.  Still, it will take some time for the change to yield a measurably higher closed sales volume in the aftermath of the subprime collapse.  In the near term, we expect home sales to remain fairly stable.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.38 percent in October, unchanged from September; the rate was 6.36 percent in October 2006.  Last week, Freddie Mac reported the 30-year fixed rate fell to 6.20 percent.

The national median existing-home price for all housing types was $207,800 in October, down 5.1 percent from October 2006 when the median was $218,900, but there is a downward distortion from the temporary problems with jumbo loans that slowed sales in high-price markets, and that dragged down the national median.

NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., emphasized that all real estate is local.  “Keep in mind that home prices are up in 93 out of 150 metro areas, and there is a lot of confusion in the market from reports about national data.  Broadly speaking, home prices in most areas are up modestly or fairly stable,” he said.  “Areas with population or job growth are seeing the strongest home price gains.”

Among the many metro areas showing healthy price gains are Charlotte, N.C.; San Francisco; Albuquerque; and Green Bay, Wis.

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