August showed a slowdown in traffic for all three groups of homebuyers – current homeowners, first-time homebuyers and investors but investors were the only group in the HousingPulse Homebuyer Traffic Indexes that scored below 50 in August, which indicates traffic dropped below what is considered a “flat” traffic level.
The US housing market, which saw strong growth for much of this year, may be starting to lose some steam, the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey results suggest. The sharpest falloff in the HousingPulse Homebuyer Traffic Indexes was seen among current homeowners, the largest group of home purchasers in this year’s housing market. The first-time homebuyer group also saw a decline in its traffic index.
Even with the slowdown in traffic, both current homeowners and first-time homebuyers groups are still posting relatively strong traffic numbers compared to investors.
Accompanying the drop in investor traffic is a continuing slide in the share of distressed properties – real-estate owned and short sales – in the housing market. The HousingPulse Distressed Property Index, a measure of distressed properties as a share of total home purchase transactions, fell to 25.4 percent in August, based on the three-month moving average.
That was not only down from a distressed property share of 35.8 percent seen as recently as last March, but also the lowest level ever recorded by the HousingPulse survey.
While some of the emerging slowdown is attributable to seasonal factors, there also are growing anecdotal reports from real-estate agents that higher mortgage interest rates are reducing home purchases in some parts of the country. And the impact of higher mortgage rates could become more pronounced in the months ahead, some agents warn.
“The market is slowing dramatically following the increase in interest rates. Numbers in October/November will start to show the price plateau and sales volume decline,” reported one real estate agent from California.
“Expect weaker closed transactions due to increasing interest rates and higher prices,” added an agent from Nevada
The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey involves approximately 2,000 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.