June 27, 2014
WHY ARE HOME SALES FALTERING?
Is it the economy, the job market, rising home prices, student loan debt?
SPRING-SUMMER BUYING & SELLING SEASON YET TO BLOOM – From RIS MEDIA:
Americans’ concerns about the direction of the economy and their household income appear to be weighing on housing growth. According to Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, “this years’ spring and summer house buying season has gotten off to a slow start even as mortgage rates have trended down”. It’s likely that 2014 sales will not exceed those of 2013.
NAR reports that pending sales for April which were expected to rise, fell 9.2%
REAL TRENDS – Home sales and prices continue to move in opposite directions:
Nationwide, home sales were down 6.1% in April, the worst decline since the recovery began in September of 2011. Sales fell 8.4% in the Midwest, 7.3% in the West, 5.8% in the Northeast, and 4.2% in the South.
Prices rose an average of 7.3%, broken into the following regions: Up 9.7% in the West, 7.8% in the Midwest, 7.1% in the South and 3.0% in the Northeast.
IMPACT OF STUDENT LOAN DEBT ON FIRST TIME BUYERS – From The National Real Estate Post:
Why is student loan debt such a problem now where is wasn’t 5, 10 or 20 years ago? Tuition is up and is outpacing inflation, so the rise is real. Administrative spending is up 62% in the last few years, and there’s 28% less government aid. Many are holding off on acquiring low rate mortgage loans (4%) until they pay off their high rate (8%) student loans. Those 25 – 32 year olds with a college degree will average $17,500 more a year than those without a degree. Housing costs and mortgage rates will rise, and it will cost more to buy a home in the future. If they can qualify for a mortgage now even with their student loan debt, their best bet is to buy.