Lawrence Yun is chief
economist of the NATIONAL
ASSOCIATION OF REALTORS®.
Learn what the latest
economic indicators mean for
the real estate industry.
We Can Do Better
Than 12% Mobility
Harry Reid, John Boehner, Herman Cain, Elizabeth Warren, Marco Rubio, Gary Locke. They’re
public figures of di;erent political stripes but
with something in common: Each started out in
relatively humble circumstances. All worked or
had a parent who worked in some kind of janitorial
occupation, and all strived for something more.
One of the great things about America is that
individuals who work hard can often improve
their prospects. Those who do have often needed
to relocate in the process. Historically, one-fifth
of the population has moved each year. But in the
past 25 years, the mobility rate has steadily declined. Last year only 12 percent of the population
moved, a troubling economic indicator.
Our lawmakers and policymakers in Washington should remove unnecessary barriers to
economic expansion. One such barrier is the proposed bank capital standards, which are creating
uncertainty among lenders and making it di;cult
for entrepreneurs to get funds to start businesses
and buy and lease commercial real estate. Another is something most real estate practitioners
can relate to: the di;culty even creditworthy
households have obtaining mortgage financing,
thanks in part to proposed residential mortgage
rules that are casting a pall on lending. Buying
a home within one’s means and steadily paying
down the mortgage is a familiar path to accumulating wealth in America.
To be sure, the pendulum swung too far the
wrong way when prices were high and loans were
easy for anyone to obtain. Under writing standards
should be tighter when prices are high and more
accessible when prices are low. Instead, mortgage
loans have become impossible for many qualified
buyers to obtain because of overly restrictive underwriting standards.
Will the present state of a;airs mean fewer
people will ascend the economic ladder? It might,
unless we convince regulators to apply capital and
lending rules that honor the important roles of
free enterprise and private property ownership. W
Prices & Availability
Key market data at the midpoint of 2012 suggest a solid
second half of the year. Existing-home and pending home
sales were up more than 2 percent; home prices were up
more than 9 percent on a year-over-year basis, to $187,300;
and inventories were down, pointing to possible continued
price growth. Distressed sales were down as a share of the
market, too. All trend lines are July 2011 to July 2012.
4. 5 million
2.4million 187.3 housand
( 5( p
p PRICES INVENTORY
PENDING HOME SALES
Existing-home sales is a seasonally adjusted annual rate, which is
the actual rate of sales for the month, multiplied by 12 and adjusted for
seasonal sales di;erences. Pending home sales is an index that mea-
sures housing contract activity. An index of 100 is equal to the level
of activity during 2001, the benchmark year. Inventory measures
the number of existing homes on the market at the end of the month.
Buyer and seller tra;c, current conditions, six-month expecta-
tions, short sales and foreclosures (shown as a percentage of total
sales) derive from a monthly REALTOR® Confidence Index. Results are
based on 3,409 responses to 6,000 surveys sent to large and small
real estate o;ces. The survey asks practitioners to indicate whether
conditions are strong (100 points), moderate (50), or weak (0). Some
data may be revised from previous issues.