Hooray, The Housing Market is Improving!
Mortgage rates have reached record lows, making home ownership more affordable than ever before. If you are thinking about buying a home now is the time to invest in real estate.
The historically low mortgage rates are a compelling reason to jump into the real estate market. These rates are shifting the national housing market as buyers take advantage of these low rates. In July there was an increase in the number of homes sold and the number of contracts signed. The number of total existing home sales rose 2.3 percent from June’s total. The Pending Home Sales Index―which reflects the number of contracts signed―also increased in July, reaching levels well above those reported last year. July’s index is 2.4 percent above June’s figures and a full 12.4 percent above July 2011’s figures. The index has fluctuated month to month, but there have been year-over-year gains reported for the past 15 months.
July saw an increase in demand which was reflected in the “Days on Market” (DOM). A third of all the homes bought were listed for sale for less than thirty days; only one in five homes remained on the market six months or longer. The median time a home was available for purchase in July was 69 days, a 29.6 percent improvement over July 2011’s median time of 98 days.
A drop in inventory gave way to to a quicker sale pace. By the end of July, the total inventory of homes on the housing market would have taken 6.4 months to sell at the current sales rate. This is 31.2 percent below inventory levels from a year ago when the supply of homes would take 9.3 months to sell.
The drop in supply along with the increase in demand due to low mortgage rates lead to an increase in housing prices. In July, the national median existing home price for all types of housing―including single-family, townhomes, condos, and co-ops― saw a 9.4 percent increase from last year’s median price. This represents the strongest gain in housing prices since January 2006, when the median price increased 10.2 percent from 2005 levels. The National Association of Realtor’s economists expect the upward trend to continue into 2013; median existing home prices could rise by 4.5 to 5 percent in 2012, and an additional 5 percent in 2013. So don’t wait now’s the time to get in the market!