According to the January Real-Time Housing Market Report, housing prices fell in 19 of 22 major markets. Average days-on-market increased in virtually all markets. Sixteen of 22 markets had a marketing time of over 100 days, and topped out at a tedious 144 in Miami and Minneapolis.
Real-Time notes that the decline in mortgage rates will increase affordability, but that homebuyers may stay on the sidelines "until they see evidence that housing prices have stopped dropping."
That's not all that is sidelining buyers. There's a climate of fear that has caused lenders to pull back on commercial and consumer lending.
The Federal Reserve just reported that banks are "raising their standards" for lending on mortgages and consumer loans. Banks told the Fed that they were anticipating more loan defaults and a weaker economy. Banks are requiring more disclosures and asking for more collateral before making loans. What has the Fed worried is that lenders are also getting stingy with loans to those with good credit. More than half of the banks told the Fed they were tightening credit on prime mortgage loans to the strictest standards in 17 years.
More than 80 percent said they were tightening standards on nontraditional loans, including jumbo loans.
It wasn't all glum news: Denver had the fastest rate of inventory turnover at 61 days, followed closely by Dallas and San Diego at 80 days. Denver had the sharpest decrease in days on market (39 percent), coupled with an inventory reduction of 11 percent over the last three months. That should bode well for listing prices in the spring.
If homebuyers can hold on to their jobs.
