Factors including reduced unemployment, recent measures by the government to make credit more accessible, and the still-low interest rates are all conducive to furthering the recovery of the housing market, but realtors warn that several challenges need to be overcome.
The National Association of Realtor’s most recent Realtor’s Confidence Index from November highlights a number of concerns on the minds of professionals.
Chief among these are the new mortgage disclosure rules (TILA/RESPA Integrated Disclosure (TRID) regulations) which came into affect last October. Realtors say the new regs are delaying closings and impacting sales. Some 47 percent of respondents said closing times take longer now than a year ago, with the average being 40 days compared to 35 days in July 2015.
Realtors are also worried about the continuing difficulty buyers have in obtaining credit. They warn that stringent credit standards will continue to affect sales, particularly in the case of first-time buyers. This is a particular problem in the condo market, where many units for sale are not eligible under FHA or GSE rules.
Tight inventories are another concern. The small number of homes listed for sale is limiting people’s choices and pushing prices up, leading to reduced housing affordability. Realtors warned that the low inventory is particularly pronounced for properties in the lower price range.
Finally, realtors said they were worried about the continued incidence of low appraisals and late appraisals derailing or delaying deals.