Financial Crisis

In its latest report on home sales, the National Association of Realtors reported that the number of home buyers first enter the housing market is declining, while the number of investors collect rental properties increase. The figures indicate that credit standards are stricter prices, but the rich out of the mortgage scene.

The NAR reported that only 29 percent of all home sales were the rookies for the month of January. That is below 33 percent in December and 40 percent in January 2010 (when the tax credit remains in force.) However, investors made 17 percent of buyers last year, and last month who had claimed 20 percent market share, and includes 23 percent of all home buyers in January.

Likewise all the cash-sales grew 32 percent in January, about three times the historical average, over 29 percent in December and 26 percent a year earlier. This new level is a record in the list of NAR. All cash deals average of only 20 percent of all sales in 2009 and moved to 28 percent in 2010.

"The increase in cash transactions, the market share of investors and forced home sales all go hand in hand. With the tightening of credit standards, it is not surprising to see so much activity where cash is king and investors are taking advantage of home buying conditions undervalued, "said Lawrence Yun, NAR chief economist, said.

And while sales rose, increasing investors do not necessarily indicate a strengthening of the market, but more a sign of weakness. The large number of foreclosures are driving down prices, and attracting those who have money to buy bargains.

"It's really a market driven by foreclosure," said Ethan Harris, chief market developed in the Bank of America Merrill Lynch Global Research in New York, quoted by Bloomberg News. "I do not think it's a sign of market return to health."

The NAR also reported that the distressed property for 37 percent of home inventory is sold in January, a 12-month high, a little over 36 percent in December.

The high number of foreclosures for sale is putting downward pressure on home prices, which seems to benefit only investors at this time, as low income or low credit buyers can not access the funds in the current mortgage climate.