Game Change

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The Latest or ig i nat ion ORIGINATION Homebuyer Demand Softens se r v ic i ng Redfin reports a drop in the number of customers requesting tours and signing offers. S e c on da r y M a r k e t a na ly t ic s H Asking Prices Soar Again in June Trulia reports a 20 percent leap in homebuying costs over the last year. A sking home prices took off in June, soaring 10.7 percent year-over-year, Trulia reported. Month-over-month, asking prices inched up by 1.5 percent and rose 4.1 percent on a quarterly basis. Trulia also tracked the 100 largest metro areas and revealed 99 markets experienced an increase in asking prices over the last year. While home prices have been trending upward for more than two years in markets such as San Jose, Phoenix, Denver, and Miami, certain markets—especially along 58 | The M Report the East Coast and Midwest— finally bottomed out over the past six months. Among the recently bottomedout markets, Edison-New Brunswick, New Jersey, saw the biggest jump in asking prices, at 8.6 percent. Chicago was close behind with an 8.4 percent increase, followed by Lake County-Kenosha County, Illinois-Wisconsin (+7.9 percent), Baltimore (+7.1 percent), and St. Louis (+6.4 percent). According to Trulia's chief economist, Jed Kolko, the increase in home prices and mortgage rates has added a significant cost to homeownership. "In the past year, buying a home has become at least 20 percent more expensive," Kolko said. "For young first-time homebuyers who don't remember life during and before the bubble, these rising costs are a rude awakening." Rents rose at a slower pace of 2.8 percent year-over-year, though it was still the biggest increase since January. In Houston, New York, and Philadelphia, rents picked up at a faster pace than asking prices. The scenario, however, was reversed in Las Vegas; Oakland, California; and Sacramento, where asking prices shot up by at least 30 percent while rents saw a slight decrease over last year. omebuyer interest diminished somewhat in June, according to Redfin's Real-Time Demand Pulse. The tracker measures the number of Redfin customers requesting tours and making signed offers as reported by the brokerage's agents. According to the findings, the number of customers taking tours fell 1.9 percent month-over-month in June, sinking even further than the 1.5 percent drop recorded last year. For the last week of the month, Redfin reported a 2.7 percent decline in tour requests from the prior week (compared to a 2.3 percent decline the same week in 2012). Meanwhile, the number of customers making offers dropped 5 percent from May to June, slightly more than last year's 3.2 percent decrease. Week-over-week, offers closed June with a 1.2 percent increase, far less than the 4.8 percent weekly increase last year. "The slack in demand reflects buyer reactions to climbing interest rates and home prices, which are pricing some buyers out of the market," said analyst Tim Ellis. "This points toward a continued softening of sales through the summer." With closed sales typically peaking each year in June, Redfin expects continued monthly declines in touring and home offers through the end of 2013.

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