Chicago, IL (PRWEB) January 27, 2013
The Federal Savings Banks sees improvements over the last year in the housing market, despite home prices still being near historic lows and foreclosures more frequent than they were before the housing crisis. Recently released statistics showed that the real estate market took a step back from the progress it had previously made.
According to the National Association of Realtors, existing-home sales decreased in December from the previous month, but numbers were well above those reported a year ago.
"Record-low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales," said Lawrence Yun, chief economist of the NAR. "The number of potential buyers who stayed on the sidelines accumulated during the recession, but they started entering the market early last year as their financial ability and confidence steadily grew, along with home prices. Likely job creation and household formation will continue to fuel that growth. Both sales and prices will again be higher in 2013."
Total existing home sales are completed transactions, accounting for single-family homes, town homes, condominiums and co-ops. The number of total existing homes decreased by 1 percent to a seasonally adjusted annual rate of 4.94 million in December from November's downwardly revised 4.99 million.
Broad recovery experienced in housing market
Despite the slight decline in existing home sales, the RE/MAX National Housing Report showed there has been broad recovery across the country. According to the source, home sales and prices have increased in every month of the year on a year-over-year basis. The median price of homes jumped by 7.6 percent, and low interest rates, affordable pricing and shrinking inventory gave many first-time homebuyers the boost needed to secure the home of their choice.
"Although mortgage interest rates should gradually rise as the year progresses, they're expected to stay below 4 percent during the first half of the year, meaning qualified buyers generally can stay well within their means," said Gary Thomas, president of the NAR. "Although tight inventory is limiting home sales in many areas, overall sales are expected to stay on an upward trend. The biggest impact of tight inventory is upward pressure on home prices, but after values fell below replacement construction costs, prices are still affordable in most of the country."