Why are home sales so slow?

TEXT OF STORY

Scott Jagow: And then, there’s this new poll out from Reuters/Zogby. It finds that many Americans think it’s a good time to buy a home. So, why pray tell, is it taking so long for people to sell their houses? Here’s Marketplace’s Jeremy Hobson.

Jeremy Hobson: About 54 percent of those surveyed see falling home prices and smell a deal. Still, nearly three quarters think the U.S. economy is in a recession. And that may explain why they’re not buying, says Holden Lewis of Bankrate.com. He says buyers know they hold all the cards, and they’re waiting for prices to fall even further.

Holden Lewis: They realize it really is a good time to buy because they have so much leverage. But they have so much leverage that they’re not buying. It sounds almost contradictory, but that’s the way the market is working.

Still, Lewis says it’s not always up to the buyer. Lenders are watching those home prices fall, too.

Lewis: Lenders are requiring bigger down payments. In some markets, you have to have 15 percent. A lot of first time buyers just don’t have that cash.

One thing he says shouldn’t be holding people back — interest rates. Historically, even 7 percent on a 30 year fixed rate mortgage is pretty good.

In Washington, I’m Jeremy Hobson for Marketplace. for Marketplace.