The majority of REALTORS® continued to report rising home prices and improving days on the market. However, REALTORS® reported that the market remains hampered by a “demanding and rigid loan qualification process” that has made mortgage underwriting “a nightmare” and “the toughest hurdle.” This has led to cash buyers and investors easing out first time buyers using mortgage financing. Low inventory persists and REALTORS® have reported homes selling above the list price. Policy uncertainty on a variety of economic and and tax issues, mainly due to the tepid job growth and measures to avert the the fiscal cliff — continues to dampen the market. Hurricane Sandy also caused a temporary market slowdown in the affected areas, although a recovery is anticipated in the coming months.
Concerns over the residential home sale market are probably reflective of current economic uncertainties. In fact, the home sales markets have been recovering in price and sales in many areas, and mortgage rates are low—although finding a mortgage may take a number of applications. REALTOR® confidence is well above its level two years ago, and prices and sales are slowly increasing. Assuming that the economy continues and that the fiscal cliff issue is addressed — which is the assumption of most economists — one would expect a continued expansion of home sales.