DAILY REAL ESTATE NEWS | TUESDAY, AUGUST 30, 2016
A dearth of homes for sale, declining affordability, appraisal issues, and lender processing delays are the key issues affecting sales, according to the latest REALTORS® Confidence Index Survey, a survey sent to more than 50,000 real estate professionals about their latest transactions. That said, most REALTORS® remain confident about the outlook for the housing market for the next six months across all property types. The index showed confidence registering above 50, and confidence is higher than a year ago.
Most of the REALTORS® surveyed say that with home prices becoming less affordable they expect prices to moderate, growing at a slower pace of 3.3 percent in the next 12 months.
Many real estate professionals report that tight inventories of homes for sale have led to multiple offers and price increases in their markets. In July, 41 percent of homes were sold at or above the list price, up from 36 percent one year ago, according to the survey.
The tight supply is making affordability a growing problem, real estate professionals report. First-time buyers, in particular, are struggling to save for a down payment. The median family income is up by 11 percent compared to January 2012, while the median price of an existing home has risen by 62 percent over that time.
“Homes are still generally affordable, but the gap between actual and qualifying income of first-time home buyers has narrowed,” according to the report. “As of the second quarter of 2016, NAR estimates that the median income of first-time home buyers is $44,703, only slightly above the qualifying income of $42,720.”
While the majority of transactions are being settled on time, REALTORS® still report that 32 percent of transactions faced a delay and 6 percent were terminated from May to July. The top reasons for a delay were due to issues related to obtaining financing (41%); appraisal issues (27%); home inspection or environmental issues (11%); and titling or deed issues (10%).