July home sales across the country were lower than expected but the real estate pundits have differing opinions about how much of a concern that is (or if it should be a concern at all). NAR chief economist Lawrence Yun said in a press release that it was not and pointed out that the South and Midwest parts of the country have not seen a slowdown which suggests healthy market conditions. Yet over at Moody Analytics their chief economist Mark Zandi described the July numbers as ‘worrisome’ to the Wall Street Journal and says the industry should pay careful attention to whether or not buyers come out of the woodwork.
One thing they all agree on is the sudden jump in interest rates is the biggest reason for the cooled pace of sales. Low inventory is a close second. The group with the biggest decrease in buying activity is the first-time homebuyer demographic, which typically makes up forty percent of the market and helps the second and third-time buyers unload their starter homes so they can buy a ‘move-up’ property. But in the past year the percentage of buyers that are new to the property game has fallen to 29%. Most of them are holding off to see if interest rates are going to edge back down before they decide to sign on the dotted line.
What have you seen in your market?