Distressed Properties, Election Jitters Shape Housing
Market in September, Latest HousingPulse Results Reveal
WASHINGTON, DC (October 26) – A continuing slide in the volume of
distressed properties seen in the housing market is helping to boost
home prices in many parts of the country, the latest Campbell/Inside
Mortgage Finance HousingPulse Tracking Survey indicates.
Meanwhile, uncertainty about the impact of next month’s national
elections appears to be causing some would-be homebuyers to delay taking
any action until after November, according to a number of real estate
agents who participated in the October HousingPulse survey.
Perhaps the biggest news in the housing market in recent months has been
a steady rise in home prices in many areas of the country. One major
reason behind the rise in home prices, HousingPulse results
reveal, is a fairly sharp drop in the share of distressed properties
found in recent home sales.
HousingPulse Distressed Property Index (DPI), which tracks the
proportion of home purchase transactions involving distressed
properties, fell to a record low of 38.6% in September based on a
three-month moving average. This was the fifth month in a row that the
DPI has fallen, and is now down more than 10 percentage points from the
near-record-high 48.7% DPI level recorded in February of this year.
precipitous drop in the share of distressed properties in the housing
market is largely attributable to fewer foreclosed properties or real
estate owned (REO) being put up for sale by banks. HousingPulse
respondents reported in October that major banks appear to be keeping
many REO properties off the market this year. But they also suggest
banks may be looking to unload significant amounts of REO next year – a
move that could put downward pressure on home prices.
addition to the standard monthly questions about housing market
conditions, HousingPulse respondents were asked in this month’s
survey whether the upcoming national elections were having any impact on
the housing market in their area. Interestingly, the results were mixed.
number of agents reported that home sales had slowed in September and
October as many homebuyers were taking a wait-and-see attitude about the
elections. “We are seeing middle-to-high-income buyers pausing due to
the upcoming elections. We hear it daily,” reported an agent in Georgia.
“It [the election] is having a negative effect on home sales in our
market. Everyone is waiting to see who gets elected in November,” added
an agent in Pennsylvania.
other agents reported the upcoming presidential election was actually
spurring some home purchases by buyers concerned that mortgage interest
rates would rise after November. “Many of my clients are worried about
interest rates rising after the election and feel they may be
artificially held down by the current administration,” noted an agent in
Virginia. “I think now people are in a hurry before the election and not
knowing what the future will hold after the elections,” added an agent
in New York.
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
information on the survey, contact John Campbell at Campbell Surveys at
(202) 363-2069 or
* * *