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Are Americans Still Optimistic About Home Ownership?

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The COVID-19 pandemic had a significant impact on the real estate market.  As many employees were required to work from home and more Americans found themselves at home many more hours of the day, they decided it was time to make a move.  Perhaps to a house with more space for a home office and more space for the all the family members spending more time at home to spread out.  As a result, demand increased yet supply could not keep up.  Naturally, in turn, home prices increased as well. 

As Americans feel a slight return to life before the pandemic, the question is, do they still feel that it is a good time to buy a home.  Are Americans leery about the market taking a downturn and perhaps adjust itself?  An article published by Realtor.com indicates that Americans remain optimistic about the upward trend of home prices.  “Gallup’s survey found that 71% of Americans believe that home prices are going to increase over the next year in their local market” writes reporter Jacob Passy.

Further, more than half of Americans surveyed by this Gallup poll indicate that now is still a good time to buy a home, 53% to be exact.  Only 50% of Americans felt this way last year at this time.  Despite reports that home ownership is still viewed as a preferred long term investment, Google has found a significant increase in internet searches revolving around the possibility of a real estate crash.  Indicating U.S. homeowners or potential homeowners are still keeping an eye out for a change in the real estate market.

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How Has the U.S. Managed to Avoid Another Foreclosure Crisis?

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As the COVID-19 pandemic began to spread across the United States last spring and states announced shut downs, many Americans found themselves unemployed or underemployed.  As a result, the federal government took swift action to provide mortgage payment relief by allowing homeowners to enter forbearance.  A year later, as of March 2021, 2.5 million homeowners were still in forbearance, according to the Mortgage Bankers of America.

Realtor.com published an article, noting the opinions of experts who explain that, despite this alarming number of U.S. homeowners behind on payments, a potential foreclosure crisis is unlikely.  In the article, reporter Sharon Lurye explains, the current housing market conditions are likely to provide a safety net for many of homeowners.  Houses, in many parts of the United States, continue to be in high demand and the inventory remains low.  Coupled with low interest rates, homeowners behind on payments, possible nearing the end of their forbearance, could still decide to sell the home for a profit. Additionally, as Americans getting their footing and learn to adjust to the current conditions, forbearance rates dropping nationwide.

Nevertheless, there are still areas of the country where homeowners are not only seriously behind on payments, but the housing market is not as strong due to weak economies and lack of employment.  These homeowners will continue to need assistance by reaching out to their lender with the hopes of renegotiating the terms of their loan in a way that makes it feasible to make the payments.  Still, some may decide to just sell and move to a rental property, assuming they can find a property to rend. 

The good news, it seems that the U.S. isn’t headed toward a wide-spread foreclosure crisis, however there are Americans that continue to struggle and may for months and years to come.

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Will America’s Home Values Continue to Rise or Take a Sharp Downward Turn?

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For the past several months, the housing market in many parts of the United States has seen phenomenal growth in the price of houses.  Of course, high demand and low interest rates along with low inventory are to thank for the current climate in real estate.  Nevertheless, it still leaves some Americans wondering, “is this a bubble that will burst soon?”  Remember, it wasn’t so long ago that Americans saw home values increase rapidly, only to crash as a result of issues created by the sub-prime lending practices about 15 years ago.    

Experts do agree that the rapid gains in housing prices are something to pay attention to.  Experts estimate that about 5.5% of American home prices are overvalued.  Additionally, unemployment  levels have still not recovered from pandemic related layoffs and business closures.  According to Suzanne Mistretta, senior director at Fitch Ratings, “Slowing employment recovery and still-high unemployment levels are not supportive of long-term sustainable price growth.”

In an article published by MarketWatch.com, journalist Jacob Passy is careful to point out that real estate and economy experts do not expect there to be a housing market crash, but predict that the housing market will cool off.  The reason it won’t sustain the current rate is explained by Robert Dietz, chief economist at the National Association of Home Builders, “When home prices are growing faster than incomes, ultimately that is an unsustainable trend.”

As the reset of 2021 plays out, Americans may see interest rates increase modestly, which may slow the rise of housing prices. Some homeowners who requested forbearance on their mortgage, may not be able to resume the payments due to unemployment and decide to sell their homes instead of risk foreclosure. These additional homes going up for sale may also provide a relief in the demand and help prices remain steady.

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Real Estate Experts Weigh In on Cause of Low Housing Inventory

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Real Estate professionals and analysts have continued to look into why there continues to be a decrease in housing inventory along with rising home prices.  Redfin has determined that more Americans are deciding to stay exactly where they are instead of moving on to another home.  In fact, they have found that, “the typical American homeowner is now staying in their home for five years longer than they did just nine years ago.”

In an article published by Housing Wire, reporter Julia Falcon states that the average homeowner in the U.S. is staying in their home for about 13 years instead of only 8 years as they did in 2010.  There are U.S. cities that blow those statistics out of the water with homeowners deciding to stay in their homes for 20 years or more.  Cities such as Salt Lake City, Houston, San Antonio, and Dallas are in Texas see home owners that have stayed in their homes since the 1950s. 

According to the article, “Redfin agent Christopher Dillard states ‘Because prices have been going up, and folks are gaining more and more equity, it’s hard to justify selling when there aren’t many if any affordable options.’”

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Could the First Week Of Fall be the Best Time to Buy a House?

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Buyers often wonder which the time of year it is best to purchase a home.  Many know that the spring market is when many homes come on the market and buyers begin looking in order to purchase homes before the start of the next school year.  However, as far as deciding when to buy a home based on getting the best deal, it turn out that the time is now! 

In an article published by Forbes, the week of September 22-28 has been identified, by Realtor.com as the “best week of the year to buy a house”.  In the analysis, it was found that the number of listings increase by more than 6% on average this week and the home on the market are just over 2% more affordable as price cuts close around 6% trend this week of the year. 

Overall, buyers will see less competition this week as the summer has come to a close and a number of buyers have exited the market for the year. Nationally, the competition is down by a quarter, with some local areas seeing a decrease in buyers close to 40%. 

Sellers can look forward to some positive news regarding this first week of fall, “…buyers have a more serious mindset and they are focused on making a purchase before the end of the year.”  Perhaps this unlikely time of the year to buy a home will be a win-win for sellers wanting to close the deal before the end of the year as well.

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Is Housing Market Ready to Rebound?

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Homeowners trying to or thinking about putting their home on the market may have been a little hesitant based on the trends in the real estate market over the past year.  As real estate professionals know, and homeowners may have noticed, the real estate market took a turn last summer.  An increased number of homes hit the market, but higher prices and decreased sales, the outlook for homeowners was less than ideal.

However, homeowners may be able to breathe a sigh of relief as this slump could be coming to an end.  With mortgage rates dipping below 4 percent and a slowed housing inventory, it appears prices and home sales should begin to climb again.

According to an article published on Realtor.com, written by Clare Trapasso, “…much of the fate of the housing market relies on mortgage interest rates. If they stay low, buyers have more money to spend on homes. So prices have more room to rise.”  However, homeowners should be aware, despite a high demand for homes as younger buyers begin their families and look to settle down, current buyers, Chief Economist Danielle Hale of realtor.com®  warns “seem a little more patient. They’re more willing to wait for a good property.”

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How is the New Housing Market Faring So Far in 2019?

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The 2019 real estate market is approaching the halfway point of the year and recent statistics published jointly by the Census Bureau and Department of Housing and Urban Development reveal an interesting mix of ups and downs within the new housing market.  The good news is that new house prices have increased 8.8% from last May.  However, disappointing drops in the sale of new single family homes was also reported, they fell 6.9% 

An article published by Bloomberg, reported by Reade Pikert, offers some explanation behind these conflicting statistics.  A detailed view of the home sales decline reveals that the home that are experiencing the decline in sales are almost all priced below $300,000.  Thus suggesting there is a shortage of “affordable” properties. 

Additionally, sales of existing homes took a dip in April, yet the number of sales of pre-construction properties reached the highest level since 2017.  Pickert indicates, “New-home purchases account for about 10% of the market and are calculated when contracts are signed. They are considered a timelier barometer than purchases of previously-owned homes, which are calculated when contracts close.”

Despite the mixed reviews of the new housing market’s 2019 performance thus far, it seems investors remain optimistic.  The article states, ”A gauge of U.S. homebuilding-industry stocks erased losses after the data and was up about 0.3% despite losses in the broader market, suggesting investors were focusing on the upward revisions to new home sales.”

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