Severe winter weather from the south to the northeast kept prospective homebuyers indoors, resulting in home buying traffic at its lowest pace since April 2013.
The National Association of Home Builders sentiment rating slumped to 46 from 56 in January, according to the Washington-based group’s figures released in mid-February. Readings less than 50 mean more respondents in the group reported poorer market conditions than good.
Sales expectations also fell due to builder confidence declining from coast to coast. New housing construction is now expected to contribute less to the nation’s overall economic growth at the beginning of 2014.
Don’t Blame the Weather in the West
According to Jed Kolko at Trulia, while bad weather hurts construction and sales, it gets an unfair share of the blame. He said, “Two other factors are holding back sales: rising prices and the decline in foreclosure inventory. In the last quarter of 2013, sales dropped most in the west, where home price increases have been steepest, putting homes farther out of many buyers’ reach and making the math less favorable for investors.”
Indeed, while home sales are weaker across the nation, they are falling hardest in the west, where the weather has been less of a factor. Recent numbers from southern California provide a clear example. Closed sales there in December fell 21.4 percent from November and were down nearly 10 percent from December 2012, according to San Diego-based DataQuick.
More Home Loans Being Paid on Time
On a brighter note, according to figures released by Reuters, more homeowners are making their loan payments on time, a measurement that has been steadily improving over the past two years. At the same time, U.S. home sales and prices have been rebounding, while foreclosures have been declining.
Struggling homeowners have seen their finances helped by rising home values and more successful efforts to restructure home loans. Lower payments, as a result of successful refinances, have made homes more affordable. Moderate but stable job gains, still-low home loan rates, and a tight supply of homes for sale in many areas have helped fuel the housing rebound. This has also made it easier for homeowners to refinance, catch up on payments, or sell their homes, avoiding foreclosure.
While this is correct in most of the US, it is not the case for us in the Seattle area. We are seeing fast appreciation and 3-6 offers on each new good listing! Don’t let this or cold weather scare you. Buyers in Seattle are out there looking, and scooping up properties!