After gains in the last few quarters, existing-home sales slipped in April according to the National Association of Realtors.

Lawrence Yun, NAR chief economist, said the market is underperforming. “Given the great affordability conditions, job creation and pent-up demand, home sales should be stronger,” he said. “Although existing-home sales are expected to trend up unevenly through next year, unnecessarily tight credit is continuing to restrain the market, along with a steady level of low appraisals that result in contract cancellations.”

Regionally, sales fell in all areas except the Midwest, which experienced a 5.7 percent rise. This is still 16.4 percent below April 2010. Median prices remain some of the lowest in the nation, however, at $133,200.

The largest existing-homes sales decline was seen in the Northeast, which fell 7.5 percent from March and was a staggering 32.1 percent below year ago levels.

The Northeast also saw a decline in median home prices by 7.3 percent to $225,400.

Interest rates remain at historic lows, however, in an attempt to spur borrowing and sales.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said the lending community needs to return to sensible standards. “We want to ensure that qualified buyers will be able to own their property on a sustained basis from a sound credit evaluation, but banks needn’t be so stingy as to only lend to those with the highest credit scores,” he said.

Employment, tightly related to housing, showed modest gains in April, with employers adding 244,000 jobs. According to the Bureau of Labor Statistics, this is the largest gain in almost a year.

Freddie Mac reports, "The recovery is not, however, growing fast enough to quickly reabsorb all the jobs lost since the recession. Employment has to rise by roughly 130,000 a month to just keep even with labor force growth, and if the participation rate rises over the next three years to its pre-recession levels, the economy will need another 130,000 a month just for that. Thus we will need more than a quarter-million new jobs a month – something we have not yet seen on a sustained basis."

Frank Nothaft, chief economist at Freddie Mac, expects there to be an economic pick-up in the second half of 2011, which will help to heal the ailing job market.

For now, national affordability is at the highest level in twenty years. The National Association of Home Builders reports that Syracuse, NY, was the most affordable major housing market, with 94.5 percent of all homes affordable to households earning $64,300, the area's median family income.

Also at the top of the list were Youngstown-Warren-Boardman, Ohio-Pa.; Indianapolis-Carmel, Ind.; Warren-Troy-Farmington Hills, Mich.; and Toledo, Ohio.

"With interest rates remaining at historically low levels, today's report indicates that homeownership is within reach of more households than it has been for more than two decades," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "While this is good news for consumers, home buyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales."

Published: May 30, 2011

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Carla Hill, M.A., works on the Realty Times staff as Managing Editor for our online publication. She also is Producer for the real estate news channel, seen daily on RealtyTimes.com and on video newsletters nationwide.