Many of you have been asking how the real estate housing market is doing and are wondering if housing prices are rounding the corner and heading up. Throughout the country housing prices in May showed their first gain in three years. Is this a sign that the market may finally be turning around?
Yes! According to an article in USA TODAY, titled Housing Prices Rounding A Corner?, "home prices rose 0.5% in May from April, according to the Standard & Poor's/Case-Shiller home price index, which measures changes in the value of residential real estate in 20 cities." The article also states that a smaller inventory of homes for sale and a continuing rise in homes sales is a promising sign that the market is indeed stabilizing. According to Wall Street economists, home prices in 15 of the 20 cities surveyed, rose or remained stable.
There are cities still struggling. Phoenix, AZ, Las Vegas, NV, and San Francisco, CA to name a few! The cities of Dallas, TX and Denver, CO, have reported three months of prices that were higher than the previous year. Cleveland, OH and Boston, MA were up 4.1% and 1.6% (Wall Street Journal, "Home Prices Rise Across U.S.") respectively. Although year on year growth rates are still not good, critics believe the housing market has hit rock bottom and is now on an upswing.
Since January 2009, the home price index is now showing four consecutive months of smaller annual declines. This positive data is good news for lenders, who will start to see the values of their assets move higher thus resulting in fewer losses.
But according to USA TODAY and the Wall Street Journal, "economists say the big question now is whether the promising signs in the housing market will encourage homeowners enough to result in more consumer spending." (USA TODAY) As reported in the Wall Street Journal, "the improvement in housing likely gave a small boost to U.S. gross domestic produce in the second quarter, economists said. After data showed construction of new homes was stronger than expected in June and was revised higher in April and May, Macroeconomic Advisers, a St. Louis based forecasting group, ratcheted up its estimate of second quarter economic growth. It now sees output shrinking as just a .5% annual rate in the second quarter, compared with declines of 6.3% and 5.5% in the previous two quarters."
According to the NAR (National Association of Realtors), more hints of an improving housing marketing include a rise in existing home sales for a third consecutive month in June. And "sales of new homes in June jumped 11% from May, according to government figures, and the supply of homes for sale fell to 8.8 months, the lowest since October 2007." (USA TODAY)
Although it is still difficult to get a loan, the market is slowing getting better. If you are in the market for a new home, now is a WONDERFUL time to buy. There are various government programs out there now as well as rock bottom rates. Contact us to find your Knox County, Ohio home!!!
