Realtors Data Is a Bright Spot in a Confused Housing Market
The short- and medium-term outlook for the U.S. real estate and mortgage markets would probably confound Nostradamus. Have home prices bottomed out? Will they hit bottom any time soon? How long will the current interest rates last? How long will it take to sell off the REO in the market and so on.
That's why the observations, opinions and hopes of Realtors can seem like a beacon of clarity. Realtors are the people who make their living in the gritty space where real estate prices meet mortgage limitations, seller hopes and buyer expectations. The data from the National Association of Realtors' most recent Realtors Confidence Index shows that the real estate glass is, at worst, half empty.
First, a majority of Realtors surveyed (54%) expected home prices will rise over the next year and, of those, 5% expect they will rise between 5% and 10%. Second, more than half of Realtors in the month the survey was taken had participated in a real estate transaction. Third, in 38% percent of those transactions, the Realtors reported that the purchase was the buyer's first.
On perhaps the negative or questionable side, 22% of Realtors responding said the purchaser had bought a foreclosed home. Ten percent reported the buyer purchased a home on a short sale. A further 19% of Realtors reported the buyers were investors and, most strikingly, fully 30% of Realtors surveyed said the buyers had paid all cash.
Realtors also reported that 82% of their home buyers that month put a down payment on their mortgage-financed homes, with fully 38% of them putting down more than 11% of the purchase price and with another 33% putting down between 3% and 6%.
Also, especially good news for mortgage originators, Realtors reported that mortgages went to settlement on time 63% of the time and that even during these times when getting accurate property appraisals is difficult, 58% of mortgage contracts went to settlement without any appraisal-related delays.