Brighter Days Ahead for Housing
There are many signs forecasting brighter days ahead for the housing market. Spring is generally the busiest time of year, so if you are in the market for a new home, contact me today to get pre-approved.
Home Sales: The year started off with pending home sales jumping to their highest level in 18 months. Pending home sales are forward indicators that are based on contract signings which generally close within the next month.
New Construction: The pace of construction on new homes slowed a bit with the brisk winter weather but was still up almost 19% from a year earlier in January. Housing formation is expected to rise as the labor market improves and pushes more young adults out of their parents’ homes and into their own.
Consumer Confidence: U.S. consumer confidence spiked in January with the highest reading since the summer of 2007. The confidence index did drop in February, but levels were still at the second highest reading since 2007 and as the labor market continues to improve, so will consumer’s positive attitudes.
Home Prices: Home prices increased by 1.1% in January compared to December and increased 5.7% compared to a year ago. Home prices are expected to continue rising throughout the year.
Mortgage Financing: Home financing may be more attainable especially for first time buyers as certain lending changes may make owning a home more affordable. Recently, the FHA announced that they have reduced their mortgage insurance premium to 0.85%. This half percentage point decrease could save a homebuyer around $80 a month, according to CoreLogic. Another lending change comes from Fannie Mae and Freddie Mac, announcing that they now accept as little as 3% down payment.