The silver lining? This rate is still 6.4 percent above last year at this time.

Lawrence Yun, NAR chief economist, said the housing market is being excessively constrained. “A combination of weak consumer confidence and continuing tight lending criteria held back home buyers, even though the private sector added nearly 2 million net new jobs in the past 12 months,” he said.

He continued, “America’s monetary policy is contradictory and confusing, where some consumers with the best financial capacity and top-notch credit scores pay higher mortgage interest rates,” Yun said. “The Federal Reserve evidently has been attempting to lower mortgage rates, yet more consumers are faced with taking out jumbo loans that carry higher interest rates.”

Yun says higher loan limits must be reinstated in order to start fixing this housing issue.

Regionally, the largest decline was seen in the Midwest, which feel 6.2 percent. This region, however, is still 12.3 percent higher than September 2010.

The next largest decline was in the South, which fell 5.5 percent and is just 5.0 percent above last year’s figures. The Northeast also feel nearly 5.0 percent (down 4.7) and is just 4.0 percent above last’s year sickly numbers. The smallest decline was in the West where rates declined just 2.1 percent. This region sits at 5.6 percent above September 2010.

We’ll keep you posted on the latest sales activity. For now, experts agree that reduced access to credit and a continued ailing jobs market are putting pressure on an already ailing housing market.

So why are the numbers so dismal and the real estate markets still slumping, to say the least

30-year mortgage rates fall below 4% for first time – Oct. 6, 2011.

One answer lies in the lenders rules for approving loans. Right now and for the past several quarters, we have had the best affordability conditions in decades for buying a home. But still existing home sales and new home sales are way down from the levels in 2005. According the NAR reserach, existing home sales dropped 3.5% in July of 2011 and pending home sales dropped by 1.3 percent.

 Lenders strict underwriting requirements are placing a huge drag on the real estate market. The average person does not have the credit score or the cash reserves required to buy. with the rates as low as they are, the lenders requirements must adjust to jump start the market. Lenders should also ease up on the credit scores required for certain loans. There has to be a happy medium between the lenders and the average person wanting to enjoy home ownership.

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Thanks

Cal

As a real estate agent I have had several clients already call me and tell me the MID was the main reason they chose to buy a home.

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The average market time is up to 111 DOM. ( days on market ). Compare that in 2005, at the height of the boom, the average DOM was 45 days.

Looking at more local numbers, I see positive signs. Our office, which does a lot of business in Camp Hill, Mechanicsburg and the West Shore, had an increase in total units sold of 12.6% in the first quarter compared to the first quarter last year.

Our office also showed a 17% increase in gross sales dollar volume over the same period last year.

Cal Williams

July 2011

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