Lawrence Yun, NAR's chief economist, said home prices have been moderating.
"Median home prices have been moving up and down in a relatively narrow range in many markets, which shows a stabilization trend," he said. "Markets showing consistent price stability or increases are those with solid labor market conditions, such as in Washington, D.C.; San Antonio, or Fargo, N.D."
Yun noted the median price measurement reflects the types of homes that are selling during the quarter and can be misleading at times.
"The level of foreclosures, which can artificially depress median prices, can vary notably in given markets," he said. "The annual price gauge smoothes out the quarterly swings and has shown fairly stable price trends in most markets."
He said, however, that the housing market should be stronger.
"With home prices in a broad trough and historically low mortgage interest rates, high housing affordability conditions and rising rents could stimulate a more rapid sales recovery if banks get back into the business of lending to more creditworthy borrowers," Yun said.
NAR's Housing Affordability Index stood at 176.6 in the second quarter, the third highest on record after the first quarter of 2011 and fourth quarter of 2010. The index measures the relationship between median home price, median family income and mortgage interest rates; the higher the index, the greater household purchasing power.
The national median existing single-family home price was $171,900 in the second quarter, down 2.8% from $176,800 in the second quarter of 2010. The median is where half sold for more and half sold for less. Distressed homes, typically sold at a discount of about 20%, accounted for 33% of second quarter sales, down from 39% in the first quarter; they were 32% a year earlier.
Total existing-home sales in states overall, including single-family and condos, declined 5.4% to a seasonally adjusted annual rate of 4.86 million in the second quarter from 5.14 million in the first quarter, and were 12.7% below a 5.57 million pace during the second quarter of 2010. June 2010 was the closing deadline for the home buyers' tax credit.
NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said the key to healthy housing is credit access.
"It's frustrating for many creditworthy potential home buyers to realize that when they're ready to make a move, banks remain risk averse," he said. "People with good jobs, long-term plans and who are willing to stay well within their means deserve an opportunity to realize their American dream of home ownership."
"When banks return to normal and safe but sensible lending standards also return, housing will be able to contribute its traditional share to economic growth," Phipps said.
Yun clarified the point on economic growth.
"The direction of the economy will be determined principally by the housing market recovery, and indications now are pointing toward only a modest recovery," he said.
The share of all-cash home purchases was 30% in the second quarter, up from 25% in the second quarter of 2010. Investors, who make up the bulk of cash purchasers, accounted for 19% of second quarter transactions, up from 14% a year ago.
First-time buyers purchased 35% of homes, down from 46% in the second quarter of 2010. Repeat buyers accounted for a 56% market share in the second quarter, up from 40% a year earlier.
In the condo sector, metro area condominium and cooperative prices – covering changes in 54 metro areas – showed the national median existing-condo price was $169,200 in the second quarter, which is 3.5% below the second quarter of 2010. Fourteen metros showed increases in the median condo price from a year ago and 40 areas had declines.
Regionally, the median existing single-family home price in the Northeast rose 2.0% to $245,600 in the second quarter from a year ago. Existing-home sales in the Northeast declined 4.6% in the second quarter to a level of 763,000 and are 19.9% below the second quarter of 2010.
The median existing single-family home price in the Midwest fell 5.4% to $139,800 in the second quarter from the same period in 2010.
Existing-home sales in the Midwest were down 3.1% in the second quarter to a pace of 1.05 million and are 18.3% below a year ago.
In the South, the median existing single-family home price declined 2.7% to $153,000 in the second quarter from a year earlier. Existing-home sales in the South fell 3.4% in the second quarter to an annual rate of 1.89 million and are 9.9% below the second quarter of 2010.
The median existing single-family home price in the West declined 3.1% to $218,000 in the second quarter from the second quarter of 2010. Existing-home sales in the West dropped 10.8% in the second quarter to a level of 1.16 million and are 6.2% below a year ago.
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