While some would-be buyers are being hindered by low inventory and tight lending, this is the strongest performance we've seen since the housing boom. According to Keeping Current Matters, this is why:
- Mortgage availability is increasing. But while a buyers chance of being approved for a mortgage has increased over the past three years, this does not indicate another housing bubble; it is still difficult for many buyers to become qualified.
- The current Housing Affordability Index shows that is more affordable to buy a home today, than any other time since 1990. With household incomes increasing, houses should continue to remain affordable and housing demand should remain strong.
- Home prices have increased substantially over the past several years, and are well within historic norms.
- Demand for housing is growing. We continue to see fewer homes for resale compared to a year ago. In fact, the supply of these homes has been well below normal for the last 4 years.
- New homes are beginning to increase, which is addressing the issue of low inventory. But right now we're building only about half the new homes we need to keep pace with the number of households being formed.
Eventually the combination of higher prices and higher mortgage rates will lead to softening demand across the U.S. However, that is not imminent and now has very little chance of occurring before winter, when we reach the slowest time of the year for home sales.
Are you thinking about buying a home? Contact me with any questions.