Pending Home Sales Decline in August. Realtors Blame Tight Credit

From NAR:

Pending home sales slipped in August with a mixed regional performance but are higher than a year ago, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, declined 1.2 percent to 88.6 in August from 89.7 in July but is 7.7 percent above August 2010 when it stood at 82.3. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said the decline reflects an uneven market. “The biggest monthly decline was in the Northeast, which was significantly disrupted by Hurricane Irene in the closing weekend of August,” he said. “But broadly speaking, contract signing activity has been holding in a narrow range for many months.”

The PHSI in the Northeast fell 5.8 percent to 63.6 in August but is 1.3 percent higher than August 2010. In the Midwest the index declined 3.7 percent to 76.2 in August but is 8.2 percent above a year ago. Pending home sales in the South rose 2.6 percent to an index of 96.9 and are 7.6 percent higher than August 2010. In the West the index declined 2.4 percent to 108.1 in August but is 10.5 percent above a year ago.

http://c.brightcove.com/services/viewer/federated_f8/1465406675

Yun said the market is underperforming given a pent-up demand in household formation. “We continue to experience a pattern in which financially qualified home buyers, willing to stay well within their means, are being denied credit – a factor in elevated levels of contract failures,” he said. “Based on the improving fundamentals of population growth, some job additions, rent increases and higher stock market wealth, we should be seeing existing-home sales closer to 5.5 million, but are expecting just over 4.9 million this year. The unnecessarily restrictive mortgage underwriting standards are attenuating the housing recovery and are a risk factor for the overall economy.”

Although economic growth as measured by the Gross Domestic Product is expected to remain positive, uncertainty is causing some consumer hesitation. “We need to remove the road blocks to the housing recovery for people who are trying to take advantage of excellent affordability conditions,” Yun added. “Unfortunately, some buyers also will face notably higher mortgage rates on jumbo loans because of a lack of competition in the banking industry.”

What exactly are these “unnecessarily restrictive” lending conditions? You can still get an FHA loan with 3.5% down and pretty lousy credit.

This entry was posted in Housing Data and tagged , on by .

Free Updates!


Greg Fielding

Contact Info:

Real Estate Agent

925-212-2908

gregpfielding@gmail.com

Skype: gregfielding

http://gregfielding.com

J. Rockcliff Realtors

15 Railroad Avenue

Danville, CA 94526

DRE #:01397948

Connect With Me:


About Greg Fielding

I am a longtime real estate agent who has pretty much seen it all during the housing boom as bust. With experience in selling high-end property and low-end foreclosures, raw land, short sales, development work, apartment buildings, and working with investors, I bring a well-rounded perspective to my work.I also have started to do some paid real estate consulting. If you have questions or just need some good real estate advice, book an appointment at http://whattodorealestate.com/In addition to selling real estate, my insights have been featured in The New York Times, The Big Picture, and regularly on Patrick.net. I have also done consulting work with ForeclosureRadar.Starting my career, in 2003, I have sold homes throughout Alameda and Contra Costa counties, specializing in Danville, Alamo, Blackhawk, San Ramon, Dublin, Pleasanton, Walnut Creek, Lafayette, and Orinda. I live in Danville with my three kids.


Read All posts by

Leave a Reply