Potential homebuyers are “spooked” by the stock market tumbling, the deficit mess in Washington and economic news, according to a Moody’s Analytics economist.
Like what you see? Click here to sign up for a National Mortgage News free trial and daily newsletter to get the latest feature stories, news headlines, data, and in-depth analysis on the issues impacting the mortgage industry.
“Obviously, there are problems out there” that are depressing home sales, said MA associate economist Mike Zoller.
Buyers are hesitating because they may be afraid of losing their job or making such a huge financial commitment with all this turmoil.
“If they can wait six months or a year to buy a house, they probably will,” he said.
However, when it comes to the fundamentals — house prices, interest rates and affordability — “people should be buying homes,” Zoller said in an interview.
The price-to-rent ratio also is near a record low. “If you are deciding between renting an apartment or buying a house, it makes financial sense to buy,” Zoller stressed.
Meanwhile, the economy is creating some jobs. And personal incomes are above their pre-recession peak, he said, which generally signals the beginning of an expansion.
The one missing piece is confidence. “Everything is there: people just have to feel comfortable,” the economist said.
Moody’s Analytics forecasters believe sales of existing single-family homes (not including condos) are at or near their lows and sales should start increasing in the fourth quarter.
House prices could bottom by the end of the year with appreciation starting in early 2012.
However, house price increases will be “modest” in 2012, Zoller said, partially due to distressed sales.
Daily Briefing | Friday, August 19, 2011
HECM Saver Originations Top $800 MM
Lenders originated $13.3 billion in traditional FHA-insured reverse mortgages during the first three quarters of fiscal year 2011, which is down 18% from the same period a year ago.
Former Triton Financial President and CEO Convicted for Ponzi Scheme
The founder, president and CEO of Triton Financial LLC, Kurt Barton, faces a life sentence in prison after a federal jury convicted him of carrying out a Ponzi scheme that victimized more than 300 individuals that resulted in investor losses of over $50 million.
PMI Faces Delisting by NYSE
The New York Stock Exchange has notified The PMI Group Inc., Walnut Creek, Calif., that it is not in compliance with the exchange’s continued listing standard and faces suspension and delisting.
MBA Boosts Origination Forecast to Catch Up with Refis
The recent rise in refinance applications has prompted economists at the Mortgage Bankers Association to boost their origination forecast for the second half of this year by over $90 billion.
Bank Aims to Educate Buyers About Energy Efficient Homes
The North Shore Bank of Wisconsin has introduced a construction loan that promises lucrative financial rewards to those who choose to build an energy-efficient home using the new financing option.
FDIC Not ‘Targeting’ Mortgage Brokers, Agency Says
It seems more mortgage brokers are receiving notices from the FDIC that they may be sued for delivering bad loans to failed banks that were major wholesalers.
Home Sales Down 13% in Month but Up 13% in Year
A report from Re/Max covering 53 different markets found home sales dipped nearly 13% between June and July, but increased by over 13% when compared with July 2010. The data is not seasonally adjusted.
Appraisal Institute Names Texas Appraiser as VP
The Appraisal Institute named a Texas appraiser as its new elected vice president for 2012 as part of its annual changing of the guard.
Aklero Names Former ISGN Exec as CFO
Mortgage quality control technology and services provider Aklero Risk Analytics has named an executive from ISGN as chief financial officer.
DataQuick President Defends AMCs, AVMs
The president of San Diego-based valuation data and technology provider DataQuick is defending his profession against what he says are misconceptions about the fundamentals of valuations and the current regulations of the industry.
Calif. First-Time Buyers Getting Mortgages with 1% Downpayment
Homebuyers are double dipping on available federal- and state-run mortgage finance programs, in some cases buying a home with a mortgage that requires virtually no down payment.