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Freddie Mac PMMS: 30-year fixed-rate falls to at least a 37-year low

National Mortgage Professional
Dec 17, 2008

Campbell Communications survey: Real estate agents shows 19 percent drop in home sales from September to OctoberMortgagePress.comCampbell Communications, home sales, real estate agents, REO Stresses in the real estate market caused U.S. home sales to fall sharply between September and October, according to a national survey of more than 2,500 real estate agents conducted Nov. 1-8. According to the survey firm, Campbell Communications, buy-side agents responding to the survey indicated a 19 percent drop in completed transactions between the months of September and October. Declines were especially severe for sales of non-distressed properties in states where home prices have fallen rapidly during the past year, agents indicated. For example, buy-side agents indicated a 22 percent decline in non-distressed sales in Florida, a 32% drop in California, and a 51% drop in Michigan. While home sales typically exhibit seasonal variations, it is unusual for a drop of this magnitude to occur between the months of September and October. Declines in sales of real estate-owned (REO) properties (also often referred-to as "bank owned") were less severe. Buy-side agents reported a nationwide 14 percent drop in sales of REO properties, month-to-month. Buy-side survey respondents indicated a three percent drop in California for REO sales and a 10 percent drop in Michigan. In the state of Florida, buy-side survey respondents indicated an eight percent increase in sales of REO properties. A number of factors combined to cause lower home sales in the months of September and October. Real estate agents indicated that approximately one-quarter of signed Purchase and Sale agreements were canceled due to contingencies for mortgage financing or inability of homebuyers to sell their current residences. Major reasons for denied mortgage financing were "credit score" and "lack of down payment." Real estate agents also indicated that many home sellers are unrealistic about the value of their homes, pricing them well above competing REO properties. Survey results show that a substantial portion of properties listed by individuals are being taken off the market without sale. A majority of real estate agents responding to the survey specified "fear of falling prices" as a major impediment to people buying listed homes. "We can now see the effect of the recent credit crunch and associated media attention on home sales," commented Thomas Popik, designer of the survey instrument for Campbell Communications. "The effect is especially severe in states where home prices are rapidly declining or where the job market is uncertain. Agents tell us that many homebuyers have adopted a 'wait and see' attitude. Agents also say large numbers of potential home sellers remain in denial about the true value of their homes or are prevented from selling when the mortgage is greater than the market value of the home." The survey of 2,508 real estate agents is the first nationwide indication of how the credit crunch affected home sales in the months of September and October. Buy-side agents were a subset of the respondent base. Sell-side agents surveyed also reported a large drop in completed transactions for October. For more information, visit www.campbellsurveys.com.
Published
Dec 17, 2008
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