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.
Higher prices for single family homes are a strong indicator of an improving economy: one that bodes well for everyone in the housing market. Statistics do vary by neighborhood, so if you are considering selling your Long Beach home this summer and want up-to-date, personalized information, please just contact me for a market update.