This year’s gains in the housing market are likely to continue into 2013, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey results. A combination of factors, including declining time-on-market, a drop in distressed properties and rising average home prices, are all pointing to a strengthening housing market in the months ahead. Separately, real estate agents are expressing mixed opinions on the impact of a possible reduction or elimination of the mortgage interest deduction in 2013. Most warn that a change would “devastate” the housing market, while others predict only a modest impact on home sales.
The November HousingPulse findings show homes are selling at a relatively brisk pace. Time-on-market for non-distressed homes averaged 12.2 weeks last month, down from 14.5 weeks a year earlier.
One big factor having a positive impact on the housing market, particularly home prices, is a continuing decline in distressed properties. The HousingPulse Distressed Property Index dropped to its lowest level in three years in November. Just 33.7 percent of the home purchase transactions tracked last month involved distressed properties. This was down from 41.4 percent a year earlier and from a record-high of 45.6 percent in March 2011.
For non-distressed properties, the HousingPulse survey recorded an average (based on three months) home price of $271,700 in November. That was up a healthy 4.9 percent from the average non-distressed home price of $258,900 recorded a year earlier.
Current homeowners are continuing to drive the recovery of the housing market, the latest HousingPulse results show. In November, current homeowners accounted for 46.3 percent of the total home purchase transactions tracked. This was the highest level ever recorded in the HousingPulse survey and was up from 44.8 percent a year earlier.
Responding to a special “bonus” question in the November HousingPulse survey, a number of real estate agents expressed strong concerns about a possible move by Congress to trim back or eliminate the popular mortgage interest deduction. They predicted that reducing the value of the deduction could significantly reduce home sales going forward.
A smaller share of respondents were adamant that reducing or even eliminating the deduction would have only a minor impact on the housing market in 2013 and beyond.
The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey involves approximately 2,500 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.