Falloff in Buyer Traffic Suggests Market Cooldown

As temperatures cool around the country and the summer home shopping season winds down, new data suggests the market is losing more steam than normal for this time of year.

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Data from the latest Campbell/ _Inside Mortgage Finance_ HousingPulse Tracking Survey shows a drop in traffic in August for all three groups of homebuyers--current homeowners, first-time homebuyers, and investors--a strong indicator that future sales activity will slow, Campbell Surveys says.

According to the survey, the sharpest decline in traffic was seen among current homeowners, which make up the largest group of purchasers in this year's market. The first-time homebuyer group also saw a decline in traffic, though Campbell noted ""both current homeowners and first-time homebuyers groups are still posting relatively strong traffic numbers.""

The same can't be said for the investor group, which saw its index scoring below 50, indicating a decline in traffic below a ""flat"" level.

""While some of the emerging slowdown is attributable to seasonal factors, there also are growing anecdotal reports from real-estate agents that higher mortgage interest rates are reducing home purchases in some parts of the country,"" Campbell said in its survey report.

Accompanying the decline in investor traffic is a drop in the share of distressed properties, which usually attract investment from buyers seeking deals.

The HousingPulse Distressed Property Index, a measure of distressed properties as a share of total home purchase transactions, fell to 25.4 percent in August, based on the three-month moving average.

""That was not only down from a distressed property share of 35.8 percent seen as recently as last March, but also the lowest level ever recorded by the HousingPulse survey,"" Campbell said.