This year’s housing market is the strongest we have seen in decades. Over 5.49 million homes sold in June of 2015, which is the highest since 2007. Current mortgage rates are remaining extremely low since October, which is helping to boost the home sales nationwide. The typical mortgage borrower has access to rates under or near 4 percent. Consumers exercising FHA and VA financing are seeing rates closer to 3.5 percent down, with 100% financing allowed.
The improving economy we are currently experiencing is allowing low and no-payment mortgage programs. This is widening the pools of buyers, allowing lower credit score consumers, and more approval of loans at the highest clip since such data has been tracked. Homes are selling fast, as a result.
Since the tracking of NAR home sales began in 2011, we are now at the quickest pace of sales, setting a 34-day Median for U.S. homes. In other words, on average, homes are selling within 34 days of being listed for sale. Today’s mortgage market is favorable and allowing home buying to surge throughout the first half of the year. If you can find a home to buy before it sells, you will be on top of the game.
For June, there were 5.49 million homes sold. This number consists of homes that were previously lived in, not including new construction. This is a 10% jump in sales from one year ago. Currently, there are 2.3 million homes for sale nationwide. The market for right priced homes is highly competitive right now. Going back to the 34 day median number, it can be explained as half of the homes for sale in the country sold within 34 days. However, the shocking statistic is that a large number of homes exchanged hands before even being listed. This is known as “pocket listings”. One main reason homes are selling quickly right now is due to it being seasonal. Most people are buying and selling homes through the summer when it is the best time to move, switch schools, and relocate in general. Another reason, while today’s mortgage rates are low, they began rising in June. Rising mortgage rates will often boost homes sales due to a “rush” to buy from consumers.
In January, the typical home sold within 69 days of listing. Median Days On Market is not the perfect housing metric, but it can highlight the relative information in which a seller can sell a home as well as the difficulty a buyer may face. When the economy is performing well, consumers are more likely to take risks, which may include moving to buy a new home. During a period of low mortgage rates, rent tends to rise, which causes another push towards purchasing a home. A third, less obvious reason is that why Days on the Market may drop, sellers may feel less confident about their ability to find a buyer. According to a recent survey, 52% of consumers, think now is a good time to sell a home. This is the highest recorded measure since the data tracking began. When sellers start believing that it is a good time sell, it’s because they believe housing is reaching a peak.
Falling confidence suggests that sellers are concerned about their future ability to get top-dollar, which can result in home getting listed for cheaper prices. Homes are inclined to sell more quickly when sellers get nervous; and, may go under contract at the “the first reasonable offer”. The Existing Home Sales report suggests that sellers may be misguided, though — the market is quite strong.
There is just a 5.0-month housing supply and home supply of less than six month is said to favor sellers over buyers in negotiations, and home supply has been less than six months going on three years now. Today’s housing market favors sellers, but the sellers aren’t necessarily behaving that way.
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