I'm sure you've all heard how low mortgage interest rates are. And certianly now is a good time to buy your first home, move up or downsize (especially you empty nesters out there), or
Pending Home Sales Up and “Less Affordable” Down
Encouraging Trends for Home Sales and Affordability
Pending Home Sales, which measures signed contracts on existing homes and is a good leading indicator for Existing Home Sales, were up 1.6% in August. This reading was stronger than expectations of a 0.6% gain and the second best number in the last 12 months. The gains were broad based, with sales up in every region.
Pending Home Sales are now up 2.5% annually, continuing the trend of strong housing data
NAR Chief Economist, Lawrence Yun, said, “It is very encouraging that buyers are responding to exceptionally low interest rates. The notable sales slump in the West region over recent years appears to be over. Rising demand will re-accelerate home price appreciation in the absence of more supply.”
The National Association of Realtors® is forecasting home sales to rise 0.6% in 2019 and another 3.4% in 2020. Housing starts are predicted to increase by 2.0% in 2019 and jump an additional 10.6% in 2020.
Meanwhile, the U.S. Home Affordability Report on third quarter 2019 from ATTOM Data Solutions is claiming that home prices are now less affordable than historical averages in 61% of local markets, based on a study of 498 counties.
To put into perspective, this is improved from second quarter of 2019 where 70% of counties were found to be less affordable (using the same study methods). And, even better from third quarter of 2018 which found 73% of counties to be less affordable than historic averages.
The 39% or 194 counties determined to be more affordable than historical averages in the latest study includes Cook County (Chicago), IL; San Diego County, CA; Queens County, NY; King County (Seattle), WA; and Santa Clara County (San Jose), CA.
Keeping in mind the methodology in this housing affordability study may be more conservative than others, with 3 percent down payment and a 28 percent maximum “front-end” debt-to-income ratio, the trend could be a positive sign for aspiring home buyers in some areas.
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