Low consumer confidence continues to plague housing market

The July 2011 Remax National Housing Report showed home sales fell 12.7 percent compared to June, but increased 13.1 percent from July 2010. According to the report, continued weak consumer confidence, strict lending standards and bad appraisals are contributed to the low July sales.

The data reported home prices remained stable and inventory levels continued to decrease for the thirteenth straight month. But some mortgage lenders implemented lower loan limits that are not set to take effect until October 1st, thus restricting potential homebuyers from obtaining a mortgage without a 20 percent down payment and a flawless credit report.

Poor economic data and the debt crisis in Europe still holds many consumers back from investing in a home, despite affordability and low mortgage rates. Glenn Kelman, CEO of Redfin Corporation, told The Wall Street Journal that the inconsistencies in the stock market are making potential buyers nervous.

"Volatility puts people on the sidelines," Kelman said. "The crazier it gets, the more cautious they become."

According to the news source, the Federal Reserve's recent statement pledging to keep mortgage rates low through mid 2013 eliminates any sense of urgency in buyers to take advantage of the current low rates. Jody Kahn, vice president at John Burns Real Estate Consulting, wrote in a statement that maintaining the low interest rates for two years will give home buyers the power to sit and wait until the economy shows recovery before purchasing a home.  

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