Analysts Worry, in Spite of Rising Home Prices
The Real Estate Marketing Insider releases its comments on a story at CNBC.com that national home price averages are continuing to rise, although experts worry about the impact coming mortgage regulations will have on the market.
La Jolla, CA (PRWEB) November 05, 2012
REMI issued a statement about CNBC.com's report that although home prices are continuing their upward trend, analysts worry that coming changes in mortgage regulation might stall market growth; REMI believes that this news is bad for home buyers, because the coming changes in regulations may result in fewer loans being given, and thus greater difficulty in buying homes and real estate leads.
CNBC.com reported that home prices experienced a 2.6 percent rise in August, and have risen 4.6 percent since the beginning of 2012. While there are many difference reasons for this spike in sales, chief among them is a precipitous drop in volumes, and therefore sales, of distressed properties, like homes in foreclosure or sold on short sale. A lower inventory of low-priced distress properties allows prices to rise, especially in markets where foreclosure or short sales have made up the majority of transactions, like Phoenix.
The share of distressed properties as a portion of total sales was 38.6 percent in September, a record low and a quick turnaround from February's 48.7 percent, which was near the record high. In Phoenix, a distressed-sale-driven market for the last few years, prices have risen 17 percent since September 2011, although they still have a long way to go to resemble pre-crash prices; currently the price average is still 41 percent lower than the 2006 peak.
While this is generally to be seen as good news for homeowners, experts worry about three principal factors: first, that banks may be simply keeping distressed properties off the market, and may decide to flood the market with properties next year to drive down prices; secondly, that the sudden decrease in inventory might stall sales and send the market spiraling again; and third, that coming changes in governmental regulations of mortgages might slow lending by up to 20 percent, resulting in up to 1 million lost home starts.
Mortgage bankers seem to also have concerns about the imminent regulations and their effects on the market. Said Bradley Shuster, CEO of National Mortgage Insurance, “We've got some very major regulatory issues that need to be resolved and clear in people's minds before you get a really vibrant rebound in the market.”
The Real Estate Marketing Insider issued its statement on news at CNBC.com that while home prices are continuing to rise, worries about the market's stability remain among experts. Concerns primarily surround coming mortgage regulations and possibilities that foreclosures could return to dominating the housing market, driving prices down.
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