While demand has settled since the spring and summer, it remains high enough to keep the value of homes higher.
Chicago, IL (PRWEB) October 01, 2015
Lenders like The Federal Savings Bank were a bit disappointed to see that the National Association of Realtors' Pending Home Sales Index, slid 1.4 percent to 109.4 in August.
Pending Home Sales Index
As reported on September 28th, this index serves as a forward-looking indicator that tracks contract signings for homes. Armed with this information, real-estate professionals and industry experts can better determine the health of the housing market and current demand for housing.
According to the NAR's index, demand may have decreased slightly when compared on a month-over-month basis. When compared to the previous year, the results indicated the market has strengthened. The index in August sat 6.1 percent lower than today's data. This suggests there are a higher number of individuals interested in purchasing homes. The Federal Savings Bank thinks that perhaps more first-time home buyers are entering the market and searching for property.
While demand has settled since the spring and summer, it remains high enough to keep the value of homes higher.
"Pending sales have leveled off since mid-summer, with buyers being bounded by rising prices and few available and affordable properties within their budget," said Lawrence Yun, the NAR's chief economist. "Even with existing–housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago."
Affordability remains an issue
Despite the lower demand for housing, the inventory is still an issue. With fewer available housing options, the value of available properties increases.
For individuals who have considered selling their home, The Federal Savings Bank thinks now might be a good time to do so as they will likely get a high price for their property.
In fact, the national median existing-home price will likely increase 5.8 percent in 2015 to $220,300, and Yun anticipates the total existing-home sales to rise 7 percent to nearly 5.28 million completed transactions.
The increase in demand and corresponding rise in home prices, while inconvenient for interested buyers, indicates that the market is healthy.
Government shutdown may impact the housing industry
According to the Washington Post on September 26th, federal agencies are announcing plans for a potential government shutdown in the future. However, there are a great deal of uncertainties around the issue.
For this reason, Yun indicated those in the housing industry should anticipate the repercussions an event such as this may cause.
"The possibility of a government shutdown and any ongoing instability in the equity markets could cause some households to put off buying for the time being," noted Yun. "Furthermore, adapting to the changes being implemented next month in the mortgage closing process could delay some sales."
However, by adapting, industry professionals can prepare for these circumstances and minimize the impact.
The Federal Savings Bank highlights that the real-estate industry has strengthened a considerable amount over the last few years, and ensuring continual success requires industry professionals who understand the market and potential speed bumps along the way.
Whether customer, reality, or trusted referral source, The Federal Savings Bank understands how important every purchase or refinance transaction is to help our clients optimize the purchase or refinance of their home.