Real Estate Market Turnaround
There is a positive buzz in the real estate market today. The current housing market reflects the overall economy and shows signs of turning around. Despite months of hearing about a housing bubble and rising mortgage rates, the outlook for real estate is good. Agents and sellers as well as new home buyers are feeling less pinched by the real estate market than in 2008.
In a national survey conducted by ING Direct, most individuals experienced some growth in their home value in the months leading up to the summer of 2008. The average increase was approximately 6%, with owners in New England and West Coast states showing the largest growth. The values of homes in south central states remained about the same.
Many homeowners are less concerned about a downturn in the real estate housing market feeling the worst is over. In the ING Direct survey, almost 74% of the individuals surveyed, who have owned their homes for more than three years, remained optimistic about the value of their home.
The 30-year fixed rate mortgage has seen the bottom and appears to be stabilizing. However, it is still a relatively low rate compared to the exceedingly high rates of the late 1980s when mortgage rates increased to over 10%. That also was a bad period for the housing market, but home sales eventually turned around producing great times for real estate investors.
According to Freddie Mac, there are indications of a strong economy, which is why mortgage rates have increased lately. Consumer confidence is on the rise and existing home sales are also on the upswing. This can be attributed to a leveling out of the labor market. Most everyone understands that stronger employment leads to greater consumer spending.
Consumer perception is everything. With the continued view that the real estate market is a good investment, people will continue to buy and sell houses. This is good news for home buyers, home sellers, real estate salespeople, mortgage lenders and just about anyone related to the real estate market.