Pace of Home Sales One of two common measures of housing market vitality is days on market (DOM). After a decline in DOM from 2009 to 2010, DOM in 2011 increased to about their level of 2009. A second housing vitality indicator is the absorption rate. It is measured by dividing the total number of sales for the year by 12, then dividing that resulting number into the number of active listings, which yields the number of months that will likely be required to work through the listed inventory. A result greater than six months is generally defined as a buyer’s market. The national absorption rate exceeded six months through-
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Missoula Independent
Median prices increased for the first time in three years in 2011.
out 2011 and the rate for Missoula, as in the past, consistently exceeds the national rate. The month-to-month absorption rate for Missoula in 2011 shows a typical pattern for our market: lengthiest absorption in the year’s early months, shortest in summer and early fall months, and lengthening again at yearend.
Homesteader 2012
Housing Finance Looking back at the outlook for 2011 many factors that are important to the mortgage market came into play. Although mortgage rates have been at record lows, high levels of unemployment and weak income prospects are likely precluding many households from purchasing homes.
Economic conditions have, and will continue to have, an impact on the housing market. Consumer confidence and lending conditions gradually began to improve in 2011, but not to levels that significantly boosted the housing market. Many households have been unable to buy homes because mortgage credit conditions are tighter than they were before the recession. Some tightening was appropriate, but today’s extraordinarily tight standards partly reflect new obstacles that inhibit lending even to creditworthy borrowers. The tightening in mortgage credit can be seen in the increase of credit scores associated with newly originated conventional and Federal Housing