September 2011, Market Update

The U.S. housing market has shown notable stability in 2011 compared to the previous two years when the tax credit made a clear impact. Although recent economic indicators have been less than expected, including a downward revision of GDP and consumer confidence that mirrors early 2009, owning a home is still valued by the majority of Americans. 72% of renters say owning is a top priority for their future, up from 68% a year earlier.

However, most aspiring homeowners are held back by two main factors: funds for a down payment (82%) and confidence in their job security (80%). Federal Reserve Chair Ben Bernanke emphasized the importance of a healthy housing market to a robust recovery. He stressed the adverse effects of tighter credit conditions for borrowers, urging Congress to take tax and policy measures to help stabilize the market.

Buyers continue to benefit from historically favorable buying conditions, and sellers are encouraged by increased market stability. Although the Fed made a commitment to keep its interest rate at the current level until mid-2013, mortgage rates can, and often do, still fluctuate. In the midst of these reports, it is important to keep in mind the path to recovery was always expected to be a long and uneven road. As we progress toward a stronger recovery, economic improvement typically spurs rising interest rates in order to keep inflation in line.
Mortgage rates hit a new record low in August of 4.15%, primarily due to uncertainty in the global and domestic economies. While these incredible rates represent a significant savings for home buyers, experts note that for the benefits to be fully realized, lending conditions must loosen to enable more buyers to take advantage of them. The window of opportunity for buyers to lock in these historically low interest rates will not last forever..
Home sales in July were up by 21% from the same month last year when the expiration of the tax credit resulted in a significant drop in sales. However, they were down 3.5% compared to June. This could be due in part to NAR’s report that 16% of members experienced a contract failure from issues in underwriting and appraisals during July.
Home prices dipped by less than 1% in July with median home price at $174,000. This is 4.5% below the year-ago level which followed a strong spring season of sales driven by the tax credit. Distressed sales continue to count for almost 1 in 3 homes sold. The combination of low prices and record-breaking low interest rates means that home affordability is extremely favorable..
The supply of homes measured in months on the market at their current pace of sales was up slightly during July compared to June. This is in keeping with historical trends, which show that inventory levels typically rise during the summer months. The month’s supply remained 25% below the peak of 12.5 months in July 2010 and 13% above April of 2010 when the home buyer tax credit was in full swing…

Information provided by Donald Miller of “YOUR SUCCESS IS OUR SUCCESS”

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About Jeff Hansen, Realtor in Colorado

Search for homes here; for FREE. Licensed Real Estate broker with RE/MAX Professionals at 10135 W. San Juan Way, Littleton, Colorado 80127. I have been a Realtor Since 1992 and provide Free Real Estate Advice Realtor in Littleton, Colorado and the Metro Denver Area, A Real Estate investment company focusing on the buyers and sellers of homes, also including fix and flips and rental properties, Listings and all sales of realty. (303)794-4530 Disclaimer I will not receive any compensation or take on any liability because of any conversation on this or any related web page w/o any written brokerage agreement. And there will be no relationship actual or implied because of any conversation on this or similar pages. No written agreement, therefore. AND Differ from state to state, so check your state's rules.
This entry was posted in Colorado, Financing, Foreclosure, Home Buying, Home selling, Housing, real estate, realtor, realty, refinancing, Short sale, Shortsale, Uncategorized. Bookmark the permalink.

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