Realtors, lenders optimistic about housing market

The housing market, which started the year slowly, is picking back up, according to bank and mortgage lenders.

Spring has brought with it a flurry of activity, with homes popping into the market quickly and being sold in the blink of an eye.
But executives say there are still challenges, such as a drop in mortgage loans, limited inventory, stiff competition among homebuyers and a dip in sales on higher-priced homes.

“The local housing market remains a mixed bag. In some local markets, there is very high demand and limited supply causing a seller’s market,” said Kevin Schmidt, president and CEO of The Neffs National Bank in North Whitehall Township.

“In other areas, sellers are holding out for higher prices, causing a slowing market,” Schmidt said “The Neffs National Bank has seen a decrease in mortgage loans versus this time last year.”

But he is optimistic about the future.

“We believe an increase in inventory, reduced prices and continued low rates could spur (home) purchase demand. Mortgage rates remain low,” Schmidt said.

At the end of May, the average interest rate on a 30-year fixed mortgage was 4.23 percent, according to the Mortgage Bankers Association, a national grade group.

One of the biggest drags on real estate has been a lack of homes for sale.

Jeff Scheuren, president and COO of Lancaster-based Fulton Mortgage Co., estimated that housing inventory in the Lehigh Valley is down 10 percent from last year at this time, with buyers competing against each other aggressively for houses. There are fewer homes up for grabs in the mid-range market, which he defines as homes in the $275,000 to $400,000 price range.

Scheuren noted that Realtors are competing more aggressively at a time when inventory is down in Pennsylvania – especially in Berks County.

“First-time homeowners are getting pre-qualified for home loans, and they are having a hard time finding what they are looking for,” he said.

Mortgage lenders have had to accommodate contracts designed for shorter time frames.

“Why not close on a home after 30 days instead of 60 days?” Scheuren said, adding that two popular financing options are government-sponsored mortgage guarantors Fannie Mae and Freddie Mac.

Fulton Mortgage Co. is under the same umbrella as Fulton Bank and Lafayette Ambassador Bank, which have offices throughout eastern Pennsylvania.

Still, Realtors and brokers are optimistic.

“Maybe the housing market is not as euphoric as it once was, but I definitely do not see any indicators of a slowdown,” said Larry Ginsburg, president and owner of Berkshire Hathaway Home Services Regency Real Estate in Allentown.