The latest release of National Housing Trend Data from Realtor.com contained some positive news for the U.S. real estate market, particularly first-time buyers. According to the report, both the inventory of for-sale homes and the average number of days properties are spending on the market are increasing, which "speaks to a healthier market in 2014 compared with the early buying season in 2013."
The number of properties for sale in March — more than 1.8 million — was 9.5 percent higher than one year ago. At the same time, price increases have remained modest, relative to recent years. The national median list price rose slightly more than 5 percent year-over-year to settle at just under $200,000 in March. Meanwhile, the median age of properties on the market rose almost 23 percent to 102 days.
HousingWire's Ben Lane noted that these trends will be beneficial for many first-time buyers, who may have been unable to make a purchase in 2013 due to the tight inventory. Data from the Mortgage Bankers Association (MBA) shows that buyers are eager to capitalize on the accommodating real estate market, particularly with interest rates trending downward.
The MBA's Weekly Mortgage Applications Survey has shown that the number of applications being processed by lenders has increased steadily during April as rates have declined. At the same time, home prices are still rising, which may create new challenges for the prospective buyers being lured into the market by the increased inventory.
In this environment, lenders need to be thorough when performing credit risk assessments for individual mortgage applicants.