Last week I talked about how I am seeing more “for sale” signs coming out on properties in my area. Reports around the country are similar to mine and it appears that homeowners who have been waiting to sell, are beginning to believe that the market is turning and that now is time to test the waters.
With rates amazingly low and home affordability at a new record, now is the time to get out and start looking. If you have been thinking about purchasing, then get on the phone with your local real estate agent and get their perspective on what is happening in your own market.
The housing market is not going to change overnight, however the one thing that is being reported is that there may be many houses for sale, but the good houses are sold almost as soon as they hit the market.
I believe we are getting closer and closer to the housing market starting to awaken. I predict the market will be slow to rise, however I feel with great certainty that the continuing economic conditions in the U.S. along with the fact that the European Debt Crisis is appearing more under control, the pieces are in place for real estate conditions in the U.S. to radically improve in the second half of 2012.
Housing affordability has once again hit an all time high. When you combine the continued decline in housing prices with low mortgage rates and the improving employment picture, the pieces are coming together for housing to turn positive. As much as home values have declined further in recent months, the pace of the declines has slowed and more and more people are beginning to believe we are close to the bottom. In addition, with the media reporting more and more in recent weeks that now is the time to purchase, we are seeing in many markets homebuyers starting to wake up.
The Mortgage Bankers Association reported that even with record low interest rates, refinances declined slightly by 2%. On the flip side purchase applications rose 2.1% which continues the gradual trend of improvement. In the coming weeks we may see the refinance index increase due to the government’s recent launch of two new financing initiatives for underwater homeowners. Many homeowners who couldn’t refinance before, may now be able to take advantage of the record low mortgage rates.
The two black eyes to housing come to us from the foreclosure arena. Foreclosure starts jumped 28% in January and foreclosure sales increased 29%. The most interesting stat regarding foreclosures is that 47% of the foreclosures are repeats. That is a tell tale sign that loan modifications are helping just over 50% of the people who get them. That is not something we like to see.
The biggest news for the week is the national unemployment rate remained unchanged at 8.3%. The economy created 277,000 jobs last month. This increase follows an upward revision for January figures by 61,000. Job growth is the best it has been since 2006 and shows that the employment sector is gaining strength.
The other piece of news that bodes well for economic stability is that Greece is on the verge of completing their debt restructuring. This agreement with bond holders all but guarantees that Greece will not default on their obligations stabilizing world financial markets.