The National Association of Realtors reported that existing home sales slowed down slightly over the summer, mainly due to investors dropping out of the market and mortgage-dependent home buyers not moving. In August, investors accounted for 12% of sales transactions compared to 20% they had been averaging before. Additionally, mortgage applications for purchases by consumers are down 16% from this time last year. As gloomy as these statistics sound, the housing market is teeming with optimism, and here are the five main reasons why you should be to:
New Construction Confidence
The National Association of Home Builders reports that builder confidence is at its highest mark in over a decade. The housing market is moving forward and sales of newly constructed homes are rising as the economy adds a steady stream of new jobs. New home sales in August were up 18%, which blew away the 4.4% that was expected.
Slower Rise in Values
As the inventory of available homes for sale increases, basic economics tells us that home values/prices have to slow down, and they have. Earlier this summer home prices rose just 0.1% in July. Slower value/price growth is great news for home buyers looking to enter the market, enabling them to get better deals and more house for their dollar.
Sidelined consumers and exiting investors means more opportunities for home buyers still active in the market, especially first timers. With home value increases slowing, more inventory, and less people in the bidding war, it is quickly becoming a buyers’ market, again you can get more house for your dollar.
Existing home sales may have dipped nationally on average as the summer progressed, but August still posted the second highest sales rate of the year, and not all areas reported a decline; sales in the Northeast and Midwest both improved.
Historically speaking mortgage rates are still low and while many analysts are predicting a rise in the future as the era of quantitative easing came to an end in September with the Fed stepping away from buying bonds, rate have remained stable through much of the year and the Fed has stated rates will remain relatively low for some time. Wherever the market heads in the months and years ahead, 1st Advantage Mortgage has several financial tools to ensure you can lock in a great rate today so you can maximize your purchasing power in the housing market.