Real estate agents are reporting more shoppers out looking for homes, spurred in part by the looming threat of rising mortgage rates. But in its latest survey of agents and additional research Credit Suisse published Tuesday, underwriting is still constrained and the limited availability of financing is slowing activity.
The Credit Suisse home shopper traffic index increased for the third consecutive month in January and is at its highest point since April 2010, the last month that buyers could take advantage of the homebuyer tax credit. The index is a measure of agents’ perceptions of traffic levels compared to their expectations for the month. A reading of 50 indicates traffic is in line with expectations.
January’s reading was 39.1, indicating traffic was below expectations. But the reading is up 10 points from December’s index of 29.1.
Agents said the belief that mortgage rates will begin to rise from historically low levels has created a sense of urgency in buyers. In Seattle, one agent noted, “Uptick in optimism; fence-sitters are concerned about possible rate increases, and less concerned about falling home prices.”
But those prospective homebuyers are finding it difficult to take advantage of the low mortgage rates. In Chicago, agents reported a difficult lending environment. “There is a lack of mortgage availability,” one agent said.
