CENTURY 21 Real Estate Releases Mortgage Market Survey
CEO Rick Davidson Says Current Mortgage Lending Environment Is 'Too Constraining for Potential Homebuyers and Detrimental to Both a Housing and General Economic Recovery'
PARSIPPANY, NJ--(Marketwire - May 12, 2011) - Century 21 Real Estate LLC, the franchisor of the world's largest residential real estate sales organization, today released the results of a mortgage market survey it conducted with its franchisees and sales professionals in order to better gauge how the current mortgage lending market is impacting the overall success of a housing market recovery.
"Our network of franchisees and their sales associates do business in all 50 states, and their responses to our survey demonstrate that the current mortgage lending environment is too constraining for potential homebuyers, and it is detrimental to both a housing and general economic recovery," said Rick Davidson, president and CEO of Century 21 Real Estate LLC. "We believe the pendulum has swung too far and that otherwise qualified potential homebuyers are facing significant challenges in obtaining mortgage financing in today's market. Our survey responses indicate that this is largely attributable to overly stringent credit score and related financial qualification requirements, high down-payment requirements and the lack of readily available financing from lending institutions. A significant number of our CENTURY 21® professionals have characterized these factors as presenting 'a major problem' for some of their customers."
The key findings from the CENTURY 21 Mortgage Market survey are as follows:
- 89% of CENTURY 21 real estate professionals had at least one customer in the past six months experience some level of difficulty in qualifying for a mortgage loan
- 87% of all respondents report that stringent credit scores and related financial qualification requirements impacted their customers' ability to close on a residential real estate transaction in the past six months -- 53% of whom described these factors as "a major problem"
- Other current market conditions impacting customers' ability to close on transactions were: low appraisal values (77%), high down payment requirements (67%) and the lack of readily available financing from lending institutions (63%), and approximately one-third of respondents described these factors as being a "major problem"
- 75% of respondents had one or more transaction fail in the last six months due to customers' inability to obtain mortgage financing
- 59% said their buyers' or sellers' transactions failed due to low property appraisals
- 62% of respondents reported that they did not see any improvement in the mortgage market from this same time last year
- 93% of all respondents estimated they could be doing more home sale transactions -- 32% more on average -- if their customers had a quality subprime mortgage alternative available to them, defined as being fully documented with down payment, income verification and reasonable credit requirements
- 63% of those respondents estimated they could be doing over 20% more home sale transactions
- 72% said their conventional loan business declined due to current mortgage market conditions, and nearly half (46%) of those respondents said that their conventional loan transactions had decreased by 30% or more compared to the prior year
- 42% said their jumbo loan business declined due to current mortgage market conditions, and nearly two-thirds (61%) of those respondents said that the extent of the decline in their jumbo loan transactions was greater than 20% compared to the prior year
Approximately 1,570 CENTURY 21® real estate professionals including franchise owners, brokers, office managers and agents participated in this online survey, which was fielded between April 19-26, 2011. Results are significant at a 90% confidence level with a margin of error of +/- 2%.
About Century 21 Real Estate LLC
Century 21 Real Estate LLC (CENTURY21.com) is the franchisor of the world's largest residential real estate sales organization, providing comprehensive training and marketing support for the CENTURY 21 System. The System is comprised of approximately 7,900 independently owned and operated franchised broker offices in 71 countries and territories worldwide. Century 21 Real Estate LLC is a subsidiary of Realogy Corporation, a global provider of real estate and relocation services.
© 2011 Century 21 Real Estate LLC. CENTURY 21® Is A Registered Trademark Owned By Century 21 Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Each CENTURY 21 Office is Independently Owned and Operated.