February 28, 2014
WEATHER OR NOT …
Demand for purchase mortgages has hit a 19 year low, falling 15% from the same time a year ago. It is now at the lowest level since 1995. Bad weather shoulders the blame for every bit of negative economic news including bad home sales and buyer traffic in January, but it should be noted that January sales fell the most in the West where weather wasn’t a factor.
The National Association of Realtors Chief Economist, Lawrence Yun notes that for a second consecutive month, foot traffic measured by home showings, fell sharply. Here too, they say that bad weather may have played a role, but that the effect is widespread and significant and suggests that the year-over-year decline in existing home sales is likely to soften further in January and February. Of course, they put a positive spin on the decline in sales as boosting inventories.
Contributing to fewer existing home sales is the lack of inventory, a less than rosy job and wage picture, and QM, the qualified mortgage rule that makes financing more stringent.
We know that January sales on Cape Cod were down from those in 2013, and soon we’ll have February statistics. However, in spite of the cold and the snow, things are changing. Real Estate Associates agents have been extremely busy over the last 4 weeks and the number of accepted offers are worthy of a robust spring market. Maybe this winter of our discontent is at last over!