Real Estate Outlook: Housing Recovery
The real estate recovery continues to roll along with a big 7.4 percent jump in home
resales last month, according to the National Association of Realtors.The current sales pace is 44 percent higher than it was the year before, including detached single family homes, townhouses, condos and cooperatives.
Equally important: Sales are up in every region of the country. They rose by 6.6 percent last month in the Northeast, 8.4 percent in the Midwest, 5 percent in the South, and nearly 11 percent in the West.
And for the second month in a row, sales totals were higher in all price classes. For most of the year, by contrast, only lower and moderate priced houses saw sales gains, while higher cost properties languished on the market. Now they're moving too.
Unsold inventories of houses also are down this year -- 16 percent below where they were the year before.
Lawrence Yun, chief economist for the National Association of Realtors, said a last-minute rush by buyers hoping to close on properties before the scheduled November 30 deadline for the $8,000 first time buyer credit added a lot of sales to the impressive November total.
Congress extended the November 30th closing deadline for the first-time buyer credit until June 30th of next year -- and added a new $6,500 credit for repeat purchasers to the mix.
Vicki Cox Golder, president of the National Association of Realtors, said the current combination of low prices, low mortgage rates and the tax credits has created an exceptionally attractive environment for buyers around the country.
It really doesn't get any better for buyers, she said, provided of course that they have secure jobs and long-term ownership plans.
Meanwhile, Fannie Mae's year-end forecast for 2010 suggests that sales of existing homes next year should jump by another 10 percent over this year, and new home sales should be 26 percent higher.
Like other forecasters, Fannie Mae sees rising mortgage rates hovering on the horizon, but not so high that they will scare away serious purchasers.
The Mortgage Bankers Association expects 30-year fixed rates to exceed 5.2 percent in the months ahead, up from about 5 percent in the latest week.
Even Federal Reserve chairman Ben Bernanke apparently is banking on higher mortgage rates as the economy warms up next year. The Wall Street Journal reports that Bernanke has refinanced out of an adjustable-rate loan on his Washington D.C. home and into a more secure 30 year fixed rate around 5 percent.
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