My Real Estate Blog

The National Association of Realtors' latest survey shows that existing-home sales rose again in September, a positive sign that the market is moving in the right direction.

A housing recovery is taking place, but will be choppy at times depending on the duration and impact of a foreclosure moratorium. The overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions.

Helping the market on it's way back to health are the historically low interest rates, nearly half what they were a decade ago. Home prices are running about 22% less than five years ago when they were bid up by the biggest housing rush on record. This means housing is affordable, with many areas seeing monthly mortgage payments less than monthly rent.

Lower home prices, however, have been linked with the foreclosures crisis. The uncertainty over the legal status of foreclosed homes in the nation could further depress home prices and delay the recovery of the housing market.  Distressed homes still accounted for 35% of sales in September. They were just 29% a year ago.

Major banks held their own internal reviews of foreclosure policies and procedures in the last several weeks. The Federal Reserve Chairman, Ben Bernanke said, "We have been concerned about reported irregularities in foreclosure practices at a number of large financial institutions. The federal banking agencies are working together to complete an in-depth review of practices at the largest mortgage servicing operations. We are looking intensively at the firms' policies, procedures, and internal controls related to foreclosures and seeking to determine whether systematic weaknesses are leading to improper foreclosures."