Homebuyer Traffic Slows
According to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, the US housing market may be starting to “lose some steam” after seeing strong growth since the beginning of the year.
Data from the August HousingPulse survey shows that there has been a slowdown in traffic for “all three groups of homebuyers,” including current homeowners, first-time homebuyers and investors. Analysts can use buyer traffic as an indicator of future home sales activity.
Current homeowners have been the largest group of home purchasers in this year’s housing mark, and it is this segment of the market that has seen the sharpest decline in traffic for potential home purchases according to the HousingPulse Homebuyer Traffic Index.
Along with current homeowners, the first-time homebuyer segment of the market also saw a decline in traffic activity. It should be noted that in spite of the slowdown in homebuyer traffic for both of these segments of the market, “both current homeowners and first-time homebuyers groups are still posting relatively strong traffic numbers.”
Though current homeowners saw the sharpest decline in traffic activity, it was the Investor segment of the market that was the only segment to score blow 50 in the Homebuyer Traffic Index. A score below 50 indicates, “traffic dropped below what is considered a “flat” traffic level,” while a score above 50 indicates that traffic activity is still positive.
Another part of the HousingPulse survey called the Distressed Property Index (DPI), shows “a continuing slide in the share of distressed properties – real-estate owned and short sales – in the housing market.” The Distressed Property Index is a measure of distressed properties as a share of total home purchase transactions. The DPI fell to 25.4 percent in August, based on the three-month moving average. The August DPI of 25.4 percent was not only down from a distressed property share of 35.8 percent as recently as last March, “but also the lowest level ever recorded by the HousingPulse survey.”
“Anecdotal” reports from real-estate agents indicate that higher mortgage interest rates are reducing home purchases in some parts of the country, however, recently mortgage interest rates have fallen, as of this writing, due to Fed action on delaying the stimulus “tapering” for now.