Housing Passes a Milestone in Improvement
Housing data shows real improvement
Hooray! The housing marketing has reached a milestone in showing signs of improvement. The housing market in the United States finally has the data to validate the predictions we’ve been hearing for a while now. The inventory is nearly depleted in many regions and asking prices for homes are increasing as well.
Reports show that almost 10% more of present homes sold in May of this year compared to last year which is certainly a true sign of improvement. Many of the recent home sales can be attributed to real estate investors who acquire homes, rent them out for a period of time and sell them when they decide not to rent them anymore. Even with the large amount of homes on the market owned by lenders, the housing inventory has declined below the healthy level of a 6th month supply.
Vacancies decline nationwide
Vacancies in the housing market have declined to the lowest that they’ve been since 2006. Many researchers attribute the increase in asking prices to the lack of unsold inventory. New construction for single family homes in May has increased 26% compared to May 2011. The housing inventory for new homes that have not been sold yet is at the lowest it has been since 2005. New housing construction projects have attributed to the improvement of the economy in the United States for the past year.
Economist state that the real estate market has began to show improvement and that the amount of homes available have started to bottom. Recent surveys show that mortgage rates are declining for 30 year loans to impressive lows at 3.62%. Although the numbers are up for sales of single-family homes, they are still 60% lower than the boom in 2002. Studies show that little over one out of every four mortgage loan borrowers still have a loan worth more than the market price of the home.
On a good note, the improvement in the housing is still something to be proud considering the lack of employment opportunities in the United States. The status of the housing market will always be affected by the condition of the job market. The more people that are employed and financially secure, the more potential home buyers you have in the market.
Although we’ve hit a milestone, there are still some issues that pose a threat to the market. There is still the possibility of a large amount unsold properties that are not being listed due to foreclosures and lender ownership. These types of homes are being listed more now due to the government regulations put into place with the intention of slowing down foreclosures. This would definitely have an effect on the asking prices in the market and would change the dynamics of the housing market. Regardless of predictions, we’ll have to wait it out, cross our fingers and be thankful for this milestone.