The National Association of Realtors (NAR) existing home sales numbers for September showed an increase of 2.4% after a modest decline in August placing the seasonally adjusted annual sales volume in the 5.1 million-range. The continued positive momentum realized during the summer has continued throughout the early fall and we are on track for a healthy volume of sales as the recovery continues to move in a positive direction.
- We continue to see a resurgence of consumers purchasing homes as primary residences. In many markets, more people are able to sell their homes, as fewer homeowners are underwater. This is a positive sign that we continue to move toward a more traditional buying and selling cycle.
- Although the investment markets have experienced some recent adjustments, overall consumer confidence remains positive — a major influence on the housing market.
- The latest Case-Shiller Report supports further improvement in housing: sales of existing homes rose in September as did new construction permits; improved employment statistics, low interest rates and slower increases in home prices– which supports home affordability and protects against a real estate bubble forming.
One of the major topics surrounding our industry is mortgage financing, particularly among first-time buyers.
- Traditionally, first-time homebuyers have accounted for 40% of home sales; however today that number is at approximately 28%. While there are multiple factors contributing to this this decline, we believe a primary influence is the current mortgage requirements.
- Full recovery of the housing market will be realized when the financing issues are addressed.
- Providing consumers with a loan that they can repay has been the mainstay of our industry for nearly 40 years. Balanced credit standards, however gave way to a variety of unimpeded lending practices which contributed to the 2008 financial meltdown. As our industry — and the economy as a whole — went into recession, the pendulum swung too far in the opposite direction as we shifted to onerous mortgage regulations and standards, the result of which forced many credit worthy buyers from the marketplace.
- The team of loan officers within HomeServices Lending, Trident Mortgage Company and Connecticut Home Mortgage are trained to provide consumers with complete home financing options as part of their commitment to delivering an unrivaled mortgage experience.
We are hopeful that balance is coming back to the home financing process. This is vital as we believe there are credit worthy individuals sitting on the sidelines who wish to purchase a home, but are reluctant either out of concern regarding their long term home value depreciation (now quickly fading) or because of their ability to qualify for a mortgage (the more likely scenario).
This new, balanced cycle must include the millennial first-time buyers. Owning a home has been and continues to be an integral part of the American landscape.