Still thinking that the market is going to drop again, that it hasn't bottomed out? You may have heard different rumors from a friend or co-worker who is a real estate or who considers themself to be an economy expert, but it's wise to listen to what established professionals, who study market fluctuations daily, have to say. The latest word from the Mortgage Bankers Association as well as from from lending giants such as Freddie Mac and Fannie Mae is that the real estate market is slowly but visibly improving (inmanNews). There are several different factors that contribute to an improving housing market, and the fact that they are all coming together at the same time means that this may be the time to start thinking about purchasing a new home from the Hughes Group Real Estate Team.
Slight upturns in both the economy and job sector, combined with homes starting to slowly gain value, have caused mortgage lenders to start lending again . Even minimal increases in home sales and new construction add value to existing homes on the market. As prices increase, lenders are willing to turn out more mortgages to consumers. (Forbes) The Mortgage Bankers Association expects purchase loan originations to grow by 16 percent next year, to $585 billion from an estimated $503 billion in 2012. A predicted increase in purchase mortgages (meaning those used to buy homes, not those for refinancing) will help the market. Increasing owner-occupied sales and decreasing sales to cash investors also cause markets to climb, even if they are climbing slowly. All of these improvements are small, but added together they make a difference. (inmanNews) Growth in new-home sales, modest home price increases, and more financed, owner-occupied sales rather than cash investor sales will drive 2013 purchase originations, said Jay Brinkmann, MBA's chief economist, in a statement.
In order to help the economy continue improving, and encourage people to buy homes, the Federal Reserve has pledged to keep mortgage rates at their current historic low. Although the Fed is continuing to buy mortgage-backed securities along with their pledge (Kiplinger), this does not guarantee that the rates will stay down forever. If you have been waiting for the right time to buy a home, now is the time to at least get in contact with our real estate team. As the market continues to experience recovery, rates will once again begin to rise, making the present a great time to take advantage of these low rates.
Current market uptrends are promising. In the years since 2005 when the new construction market peaked, new home construction has been extremely low. The country needs an increase of one-point-five-million new homes each year to accommodate increases in population and the removal of old residences. This past year only six-hundred-thousand new properties were constructed leaving a gap in what is needed and what is available. This gap means an increase of new construction in 2013, with predictions being that there will probably be somewhere around 750,000 new homes (Forbes). Increases in the number of new constructions as well as in the prices of homes, are a strong indication of improvement in the housing sector.
The Hughes Group Real Estate Team is ready to help those seeking to buy during the next year. In the current market, buying may be cheaper for many than renting. The price of renting a home continues to increase, and historically low mortgage rates are making buying a very feasible option. For those wishing to take advantage of the current market trends, our real estate team is prepared to help guide them through the process of becoming a homeowner. If current market trends are any indication, 2013 will be an excellent time for those wishing to buy or sell a home. There is no time like the present to make contact with one of the members of our real estate team to discuss what you are looking for.