Average Joe Isnt Buying a Home
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IRVINE, CA-The residential real estate market is being harmed by the plethora of institutional investors snapping up homes at inflated prices, Julie Zisfein, a senior associate with Auction.com Research, tells GlobeSt.com. The trend is “damaging affordability, putting potential buyers on the sidelines” and pushing buyers out of the market into the multifamily sector, Zisfein says.
The conclusion comes from the latest set of housing reports including the MBA Mortgage Applications Survey and National Association of Realtors, which indicate that mortgage applications and existing home sales are on the decline. (The release of new home sales data has been delayed due to the government shutdown.) Sales of existing homes have fallen for two consecutive months, yet home prices are on the rise as is the percentage of institutional buyers in the residential market, indicating that these investors are driving traditional homebuyers out of the market.
A total of 5.1 million existing homes were sold nationally in October, and Zisfein says while this is a 6% increase from a year ago, it’s still a downward trend for the last couple of months as 5.4 million were sold in August. “Looking at it on a chart, you can really see the decline. There has been a slow and steady recovery up until now, but the two-month snag looks like it’s for real. It’s the biggest consecutive decline we’ve seen since the expiration of the tax credits in 2009 and 2010. Since that little bump and drop we saw then, this is the biggest loss in home sales we’ve seen.”
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