At Palm State Mortgage Company we feel justified in celebrating our optimism for home mortgages and a sunnier economic picture!
Today, the National Association of Realtors boasted a remarkable sales jump for U.S. home resales, and they released the new housing data to prove it.
We actually saw a rebound in December, from a 19-month low in housing prices.
We are proud to say that the housing market recovery remained intact despite many expert’s gloomy forecasts and an apparent decline in economic growth in recent months.
Amazing New Data!
Existing home sales jumped a record 14.7 percent to an annual rate of 5.46 million units. This wipes out the housing slump in November, which we believe was simply a temporary phenomenon following
October’s introduction of new mortgage disclosure rules (TRID). The new paper work forced “delays in the closing of contracts in November.” You can read more about TRID at this reliable resource. The November to December National Association of Realtors® (NAR) said the seasonally adjusted annual rate of sales during the month was 5.46 million homes compared to 4.76 million in November.
Stephen Phillips, president of Berkshire Hathaway Home Services in Chicago agrees, “We knew a significant number of closings were delayed by new regulations that came into effect in October. Overall, 2015 was a very good year and we’re positioned for a strong spring market.”
If you will remember, the mortgage disclosure rules were created to help homebuyers understand loan options. Learn more about understanding your loan options and TRID in one of our previous blog articles. Last fall, both the housing data and realtors warned that the rules and new paper work would significantly increase contract closing time frames. And, so it did.
According to new housing data, “November’s sales pace was unrevised at 4.76 million units. Economists had forecast home resales rebounding 8.9 percent to a 5.20-million rate in December.” However, congratulations, home buyers! You did even better! Sales rose 6.5 percent to 5.26 million units in 2015. This is normally indicative of a healthier economy.
Experts have proclaimed this new housing data as the strongest since 2006!
Looking Back At the Facts–And Forward!
Last month’s rebound reassures us that the demand for housing and growth in the housing market is healthy, in spite of that bump in November. Some economists claimed buyers benefited from the relatively good weather in December. Economic factors other than housing sales might have contributed the slumping housing data at the end of 2015. For example, we knew there was a downturn in 
manufacturing and in mining.
For those of you who cherish deep financial numbers, you might like to note that this week, “The dollar was trading higher against a basket of currencies, while prices for U.S. government debt fell. The housing index .HGX rallied 2.04 percent, outperforming a broadly firmer U.S. stock market. Shares in the nation’s largest home builder, D.R. Horton Inc (DHI.N), were up 2.59 percent and Lennar Corp (LEN.N) advanced 2.16 percent.”
Our only fear at this point is a lack of houses for buyers to purchase! In the mechanics of supply and demand, a healthy balance is considered a six-month supply of homes for sale. However, “at December’s sales pace, it would take 3.9 months to clear the stock of houses on the market. That is the smallest inventory of houses since January 2005, and down from 5.1 months in November.
Housing data indicates that in December, the number of unsold homes on the market tumbled 12.3 percent to 1.79 million units. Be aware this is the lowest level since January 2013.
Given the small amount of homes soon to be available, the moral of the story is that if you find a home you can love in 2016, Palm State Mortgage supports your desire to buy it. We see sunshine breaking through clouds of gloom in the economic picture. And, by the way, if you are a builder, please build us more houses!
