As we promised in our last blog, we are bringing you some more statistics and predictions, and a little bit of analysis about the current housing situation. If you are house shopping, chances are that you have become acutely aware of the idea of Housing Affordability.
According to NAHB Chairman Rick Judson, “Housing affordability has been hovering near historic highs for the past several years, largely due to exceptionally favorable mortgage rates and low prices during the recession.” Like Chairman Judson, Palm State has previously warned you that this could end soon, as the market recovers. He also observed two reasons for this phenomenon.
1. Recovery: He stated, “Now that markets across the country are recovering, home values are strengthening…” As a home shopper, in search of a bargain, this might not please you so much, since it means that your dream home will be less affordable.
2. New Construction Costs: Rick Judson added, “…at the same time that the cost of building homes is rising due to tightened supplies of building materials, developable lots and labor.”
So, the individual might not obtain the bargain he would have a few months ago, but with the health of the housing industry, and the general economy improving, than might not be such a bad thing. As usual, Palm State bring you the statistics behind the story:
NAHB Chief Economist David Crowe stated that the median price of all new and existing homes sold in the second quarter of 2013 for $202,000.00. This number far exceeded last year’s $185,000.
He summarized, “Together with rising mortgage rates, this contributed to affordability slipping to the lowest level in more than four years. Such movement would be less concerning were it not for ongoing discussions regarding potential changes to the mortgage interest deduction and federal support for the secondary mortgage market, both of which play enormous roles in keeping homeownership affordable.”
We will follow the news about these potential changes, and report back to you when we know more. Meanwhile, we feel a great trust in David Crowe’s prediction that the rising interest rate will be offset by these inter-related changes.
Did you know?
1. Forecasters have great trouble predicting Florida real estate trends because the can be difficult to forecast because the “model used to analyze sales data doesn’t include second-home buyers — which are plentiful in the Sunshine State — and doesn’t factor in the amount of time investors are likely to hold on to the single-family rentals that they purchased during the economic downturn.”
2. Housing prices will be influenced by investors. They could raise, if the “investors are faster to unload their properties, but they also could fall less if investors hang on to their acquisitions.”
Remember that we here at Palm State Mortgage we will happily help you understand the current trends and vital predictions surrounding home financing, as you purchase or re-finance your home. We make it our mission to keep you informed, and we are continually pleased that you visit this blog to enhance your mortgage and real estate knowledge
