After spending weeks hypothesizing what role the sunsetting FHA seller-funded downpayment assistance was having in stimulating the recent jump in home sales, we may have our first indication this week. For the week ending October 4—the first week we've measured in which the program was unavailable to prospective Twin Cities home buyers—pending sales were ahead of the same week last year by only 3.5 percent. While this is still an upward annual trend, it is about a 15 percent decline in buyer activity as compared to the activity of each of the previous four weeks.
Now that the FHA program is gone, time will tell if home sales will continue to surpass 2006 levels, as seen over the past several weeks. While one week of a relative downturn is too small a sample size to be predictive of the future, our changing financial climate bears close scrutiny in the weeks ahead.
Listing supply continues to draw down, as new listings declined by 12.0 percent for the same time period comparison and the total number of homes for sale is 9.1 percent lower than it was one year ago.
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