Posted by: Larry Stevens | June 19, 2012

New Article: Housing Market Recovery: Pessimism or Optimism?

New Article: Housing Market Recovery: Pessimism or Optimism?

A new article has been posted on our blog by Dan Moyle:

Housing Market Recovery: Pessimism or Optimism?

 

 

housing market trends fake mapWhen we look at the housing market trends of 2012, do we see more doom and gloom, or are there bright signs ahead? Let’s take a brief look at the news, facts, and trends in the housing market.

Recent Housing Market News

  • Reports of pockets of dwindling inventories and rising home prices – cities and areas of the country reporting lower inventory of homes on the market include Washington, D.C.; Miami & Naples, FL; Seattle, WA; Orange County, CA and Phoenix, AZ.
  • The U.S. Department of Commerce reported that the median price of a new home rose to $235,700 this March a 4.8% increase from the prior year.
  • Luxury home builder Toll Brothers, Inc. reported higher than expected first quarter 2012 profits due to a strong jump in new orders.
  • Sales are up overall in all regions of the country, except the South.

As a result of these reports, the housing market trends point towards a clear increase in demand.

Housing Market Facts

  • 30-year Mortgage Interest Rates remain at historic lows
  • The latest Federal Loan Modification Program might allow 1.5 to 2 million homeowners to successfully refinance and remain in their homes, according to Mark Zandi, chief economist at Moody’s Analytics. This will go a long way in helping to stabilize home prices throughout the county.
  • Many cities remain drastically under priced when the basic home affordability ratio of median home price to median family income is applied. This indicates that there are still tremendous opportunities to buy before demand causes price increases.

Housing Market Trends

In summary, here’s what’s happening in the housing market:

  • Demand is slowly increasing
  • Inventory of existing homes on the market is decreasing
  • Refinancing assistanceis on the way for millions of homeowners who remain in trouble (underwater homeowners)
  • Interest rates are at historic lows

So does this really look like a doom and gloom picture?

While concerns remain about the overall economy and employment outlook, the housing market appears to be trending in a positive direction. Given these housing market trends, great opportunities exist for prospective buyers and investors.

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