Pending Home Sales Continue Momentum

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Peoples Home Equity shares and comments on the latest pending home sales report from the National Association of Realtors.

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The chances of a Federal Reserve rate hike is increasing as the housing market continues to improve and wages increase.

Lenders like Peoples Home Equity were very pleased to see that pending home sales have increased for the 3rd consecutive month.

According to the April 29th report from the National Association of Realtors, pending home sales increased 1.1% in March and are 11.1% above year-ago levels. Year-over-year, the index had increased consecutively for the past 6 months, and while 11.1% is not as high as the 12% above year-ago levels in February, it’s still at its highest point since June 2013.

Lawrence Yun, chief economist at the National Association of Realtors, said, “Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year.” He continued, saying, "While contract activity being up convincingly compared to a year ago is certainly good news, the increased number of traditional buyers who appear to be replacing investors paying in cash is even better news. It indicates this year's activity is being driven by more long-term homeowners.” Peoples Home Equity agrees wholeheartedly. The lender expects national real estate activity, both sales and prices, to continue rising as more Americans build/rebuild their credit and save up for a down payment on a property. This is especially the case among young first-time home buyers who are eager to stop paying rent.

Lawrence Yun did mention his caution regarding the recent increase in pending home sales by stating, “Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer.” He continued, saying, “This, in turn, has pushed home prices to unhealthy levels — nearly four or more times above the pace of wage growth in some parts of the country. Simply put, housing inventory for new and existing homes needs to improve measurably to improve affordability.” Indeed, in areas such as Chicago, where Peoples Home Equity centers much of its business, home sales and prices are on the rise this April.

Regionally, The National Association of Realtors reported that for March, the Northeast experienced a 1.5% fall in pending home sales; this is the fourth consecutive month of a decline in sales. Sales in the Midwest also fell 2.5%. In the South, sales increased by 4%, and in the West, they increased by 1.7%.

The chances of a Federal Reserve rate hike is increasing as the housing market continues to improve and wages increase. Peoples Home Equity strongly encourages all prospective mortgage applicants to apply for a home loan now to lock in a great rate, potentially below 4%.

If you are interested in purchasing a property and are in in need of a mortgage, consider speaking to a Peoples Home Equity loan officer today at: 262-563-4026

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Giorgio U Ferrero
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