Area Home Sales Down From Last Year, Above 2012 Levels

Christine Benson describes the Northwest Arkansas housing market as odd.

"It's been a strange year with a lot of peaks and valleys. It feels like it picks up and then goes away," the Simmons First National Bank mortgage loan officer said. Benson also is president of the Arkansas Mortgage Bankers Association.

There were 742 home sales in August in Benton and Washington counties, down from 816 in August 2013, according to MountData, a real estate marketing firm. Home sales for the year through Aug. 31 were 4,868, down from 5,013 sales in the first eight months of 2013.

Paul Bynum, owner and director of MountData, said this year's numbers have been consistently below last year's levels, but that does not mean it is a bad year.

"Everything has to be taken in a wide perspective," he said. "The myths that this year has to be better than last year are simply not true. Some years do better and others don't."

Home sales in the two-county area are well above the 634 homes sold in August 2012 or the 4,203 homes sold through the first eight months of 2012.

Foreclosures continue to drop in both counties. There were 22 foreclosures in Benton and Washington counties last month, down from 99 a year earlier, according to RealtyTrac, an online marketplace for foreclosure properties.

Benson agrees it may not be the best year for sales, but it has been and could be worse. She said the U.S. Department of Agriculture's plan to shrink the area eligible for Rural Development loans could have been detrimental for local borrowers.

The USDA was supposed to start using an updated map Oct. 1 but have pushed the time line back.

The program backs home loans to people in rural areas making 115 percent or less of their area's median income and requires no down payment.

The 2014 federal Farm Bill makes areas with a population of up to 35,000 and rural in character eligible for the loans. The eligibility maps haven't been updated since 2000.

State USDA offices make the "rural in character" designations and have until Sept. 30, 2015, to made those decisions.

Neither a voice mail nor email message to a spokeswoman at the Arkansas Rural Development office were returned by 4 p.m. Monday.

The Arkansas Mortgage Bankers Association sent a letter to Agriculture Secretary Tom Vilsack on Aug. 28 stating the group believes the USDA has too much power regarding the "rural in nature" clause.

"Eligibility should be based solely on the population of the city and not on USDA's opinion of what qualifies as rural and what does not," the letter states.

Benson said there will still be changes to the map sometime this year, and she anticipates Bentonville will be excluded.

Joel Doelger, director of community relations and housing counseling at Credit Counseling of Arkansas, said the Rural Development loans help people get into homes, but he believes it is good for people to have "skin in the game" in the form of a down payment.

"It shows that they can save, and it helps make sure that they're not tempted to just walk away from the home if they encounter financial troubles that are not insurmountable," he said. "At the same time, we know that people are kept out of home ownership because they don't have a down payment saved up."

He said many attendees of CCOA's monthly home education class are Rural Development buyers. The agency offers a free monthly class that is open to the public. The next class is Oct. 4 at United Bank, 2790 S. Thompson St. in Springdale. Registration is available at ccoacares.com.

"We discuss budgeting and saving in the class, which could help new buyers reduce or successfully deal with short-term financial stresses, and thereby remain in the home," Doelger said.

Regions Bank has loan programs that also require borrowers attend a home buyer counseling program.

The bank also has a program similar to Rural Development loans, but does not have the geographic limitations, said Keith Smith, the bank's regional mortgage manager for Arkansas. "Regions Affordable 100" program's income limit for Benton and Washington county residents is $47,600.

"It's our own portfolio loan and requires no money down and no mortgage insurance," Smith said.

The bank recently kicked off its First Time Home Buyers Program to help people that don't qualify for the Affordable 100 or Rural Development loans, he said.

The program provides qualified borrowers a fixed rate mortgage with the bank paying the closing costs. Potential first-time buyers can also borrow up to 95 percent of the home's value.

"We developed this program because we hear that first-time home buyers are not moving into the purchase market as fast as they have in the past," said Smith. "We know one of the barriers is accumulating enough cash to close and this program will help speed up the process."