Home sales, average price up in Corridor

The housing market in the Corridor and the state of Iowa showed some improvement in May, with more homes sold and a higher average sale price than in the same month last year.

The Cedar Rapids Area Association of Realtors reported 388 homes sold last month with an average sale price of $157,343, compared with 365 homes sold in May 2011 with an average sale price of $147,224.

The median price slipped to $133,000 in May from $134,900 in the same month last year.

The median price means half the homes sold for more and half sold for less.

Homes were on the market in the Cedar Rapids area for an average of 95 days last month, compared with 108 days in May 2011.

While more homes were sold last month in the Cedar Rapids area, the number of sales were still less than in May 2010 when 445 homes were sold.

At the southern end of the Corridor, 276 homes were sold last month according to the Iowa City Area Association of Realtors, with an average price of $188,078 in Iowa City and Coralville -- up from 239 homes sold in May 2011 with an average sale price of $180,309. The median price rose to $164,500 in May, from $150,000 in the same month last year.

Homes were on the market in Iowa City and Coralville for an average of 88 days last month, compared with 105 days in May 2011.

Statewide, 3,418 homes were sold in May with a median price of $130,000, up from 3,001 homes sold in May 2011 with a median price of $121,250, according to the Iowa Association of Realtors. The organization does not release the average home price.

Twenty-nine of the 44 local Realtorboards across the state reported an increase in sales and 28 Realtor boards recorded a higher median sale price.

The average number of days on the market in May was 102 days, a 2.9 percent decrease from 99 days in May 2011. Twenty Realtor boards reported a decline in the number of days on the market.

The statewide inventory of homes on the market at the end of May was 21,259, down 12.9 percent from last May when the inventory was 24,394 homes.

Dale Gross, president of the Iowa Association of Realtors, said the numbers for May continue a positive trend for Iowa's housing industry.

"It appears that people are taking advantage of the low interest rates and good prices and making a move, which ultimately means great news for the housing market here in Iowa," Gross said. "More than 12,300 homes have been sold in Iowa through the end of May, up more than 1,500 homes from last year at this time."

Mortgage rates in the rose from a record low in the most recent week, breaking a seven-week streak of declines that fueled demand for home loans.

The average rate for a 30-year fixed mortgage increased to 3.71 percent in the week that ended on Thursday from 3.67 percent, the lowest level in records dating to 1971, according to a statement from Freddie Mac. The average 15-year rate climbed to 2.98 percent from 2.94 percent.

Low borrowing costs are prompting many homeowners to reduce their monthly payments by refinancing, which also helps stabilize the housing market. Mortgage applications surged 18 percent in the week that ended on June 8, according to the Washington, D.C.-based Mortgage Bankers Association.

In his monthly perspective on the economy published on June 1, James Paulsen, chief investment strategist with Wells Capital Management, wrote that  the housing sector finally seems to be joining the recovery party.

"An array of data in recent months suggest activity in this industry is more pronounced than at any time since the recovery began," Paulsen noted. "If the economy has thus far managed almost 2.4 percent annualized real GDP growth without housing, how much will real growth be boosted if the housing industry now regularly contributes to the economy?"