A recent survey highlighted that home prices in the United States have risen with 12.1% since April 2012, and even more since May 2006. The ever-increasing number of buyers and the relatively limited number of available homes have determined prices to show an incredible climb in the whole country. That’s great news, as it means that the housing market is finally recovering after the financial recession.
What is more, the price index for twenty city homes was recently released, and it presented an increase of 2.5% in the last two months, this being the biggest gain in a very long time. All other cities, except Detroit, recorded gains in this period, which had an excellent impact on the housing market.
In addition, for the last four months, prices have continued to increase in 20 of the most important cities in the US. Twelve metropolitan areas have registered double digit gains, and several important cities such Las Vegas, San Francisco, Phoenix, and Atlanta showed price increases of over 20% during the last year. Likewise, Minneapolis displayed a growth of 15%, but unfortunately Los Angeles and Detroit remained the with insignificant gains.
Presently, the housing recovery appears to be more sustainable than ever, and it will keep growing in 2013, counterbalancing exorbitant taxes and federal fees. Steady jobs, increasing numbers of working places, and low mortgage rates, have encouraged people to invest in the housing market once again. Nobody can predict what will happen one year from now, although specialists agree that the housing market has shown incredible results thus far.
Rumor has it that the housing recovery is anticipated to continue, in spite of the fact that mortgage rates are currently rising. Consequently, the Fed may slow the bond-purchase program, which is aimed to keep interest rates relatively low and accessible. The main issue of the current housing market is the willingness more banks have to lend money, and according to a recent survey, there are many banks that have eased their credit standards. Hence, first time home buyers have greater chances of getting approved for a mortgage.
Moreover, the index covers more than half of the US, and it measures costs compared with those obtained in January 2000, in order to create a three-month moving average. The prices tendency is clear, and they will continue to rise, because currently there’s a great demand for homes. Residences available for sale are not that many and this data has made builders and constructors seem rather optimistic; they expect to receive more jobs and projects in the near future. Sales of previously occupied houses have risen with 4.2% in May, exceeding the 5 million mark. If we were to exclude a couple of months from 2009, when the home-buying credit influenced sales, the house sales have not gone over 5 million since July 2007.
Although prices are on a good upswing, they still have a long way to go to reach the figures from before the crash. Because of increasing mortgage rates prices might experience fluctuations, and a recent report has revealed that an average mortgage of 30 years just hit 4.5% this June.