cityspace

The Wall Street Journal spent some time compiling the latest data on existing-home sales, homebuilder sentiment, mortgage rates and housing affordability, concluding that there is no reason for today's buyers to panic. In fact, the publication not only declared that there is no need to be anxious about what is happening in real estate right now, but it also concluded that the housing market is actually getting stronger.1

Existing-home sales increased in April for the second month in a row.

Builder Confidence Remains High as Existing-Home Sales Rise  

WSJ cited data from the National Association of Home Builder's May builder sentiment survey, which reported that for the fourth month in a row, builder confidence is at a level of 58 out of 100, which is considered "positive territory," according to NAHB Chairman Ed Brady.2 The rating is determined through a survey of NAHB members regarding confidence in housing market conditions for new single-family homes.

Another positive sign for the housing market: Existing-home sales increased in April for the second month in a row. Existing-home sales refer to completed transactions of single-family homes, townhomes, co-ops and condominiums. In April, they rose 1.7 percent, resulting in a seasonally adjusted annual rate of 5.45 million, compared to 5.36 million in March. Compared

to one year ago, home sales in April were up 6 percent. Much of this growth can be attributed to an increase in home sales in the Midwest.3

Homes are Becoming More Affordable 

There has been a lot of talk about homes becoming increasingly difficult to afford as demand rises, which is why you may be surprised to hear that affordability has actually been improving. The NAHB's Housing Opportunity Index found that the first quarter of 2016 was the second quarter in a row that housing affordability improved across the U.S.4

The improvement is due to both a slight decrease in mortgage interest rates as well as better home prices. In the fourth quarter of 2015, the national median home price was $226,000, and in the first quarter of 2016 that number fell to $223,000. Additionally, in the fourth quarter, 63.3 percent of new and existing homes were considered affordable for those earning $65,700, the median U.S. income. In this years' first quarter, 65 percent of new and existing homes became affordable to median income earners. 

The latest from #EyeonHousing: Housing Affordability Posts Second Straight Quarterly Gain https://t.co/abTmHAddOJ pic.twitter.com/wa5isISinl

— NAHB (@NAHBhome) May 12, 2016

The Most Affordable Places to Live 

The Housing Opportunity Index also included a list of the most affordable places to live, and for the second quarter in a row the winner for most affordable major housing market was Youngstown-Warren-Boardman, Ohio-Pennsylvania; followed by Syracuse, New York; Indianapolis-Carmel-Anderson, Indiana; Scranton-Wilkes Barre-Hazleton, Pennsylvania; and Toledo, Ohio. The most affordable small housing market was Cumberland, Maryland-West Virginia. The least affordable major housing market was San Francisco-Redwood City-South San Francisco, California for the 14th quarter in a row, and the least affordable small housing market was Santa Cruz-Watsonville, California.

NAHB's Chief Economist Robert Dietz said in a statement that favorable home prices, low mortgage rates, a growing economy, rising employment and pent-up demand will contribute to more home sales in the second half of 2016. Chairman Brady also commented on today's growing housing market:

"With interest rates near historic lows and attractive home prices, this is a great time to buy a home," Brady said. 

Navigating a seller's market can be tough, but now that you know it is a great time to be a buyer, all you need is expert guidance to help you buy the home of your dreams. For advice on mortgages, contact a Loan Officer at New American Funding who will walk you through every step of the home buying process.

Sources 

1Wall Street Journal
2National Association of Home Builders 1
3National Association of Realtors
4National Association of Home Builders 2