According to the National Association of
Realtors®, first quarter
statistics again point to better home sales figures. This time it was the
prices of single family homes that rose in half of the major cities in the
United States. Because of the wide differences between regional and state
conditions, these figures are never in 100% lockstep, but Long Beach homeowners
should be encouraged by the report’s breadth: prices rose in more than twice as
many cities as fell.
Of course, rising prices are always good news
for homeowners who want to sell their homes; but beyond that, the effect of
movement in that direction is welcome throughout the economy. Consumer
confidence is strongly influenced when home sales prices stabilize (just as it
is rocked when prices fall).
There are a multiple reasons for the upswing in prices for home sales:
Employment Rates Improve
Although unemployment rates are still
relatively high, the U.S. Bureau of Labor reported that the overall rate fell
to 8.1 percent in April. Even for those who are currently employed, the
knowledge that more jobs are out there is encouraging. When the specter of
prolonged joblessness recedes, financial confidence rises and home sales can be
expected to follow.
Low Mortgage Rates
Mortgage rates are still at historical lows --
and the effect on affordability is dramatic. Currently the national 30-year
fixed rate is at 3.97% according BankRate.com. As I have discussed before,
although lenders have raised the requirements to quality for a loan, such low
interest rates make a mortgage more affordable for eligible home buyers.
Fewer Homes Available
Despite the inventory of foreclosed
properties, fewer homes were available for sale this year than during the same
period in 2011. Nearly always, home sales register higher prices when the
housing market tightens – and that did seem to be happening in a growing number
of metropolitan areas.
