Real Estate Outlook: A Bright Market
by Kenneth R. Harney
The stock market may be jumping around and jittery, but housing numbers are headed in just one direction, and at least for the time being, that's better and better.
Pending home sales jumped again. They were up by 3.2 percent for the month of July, according to the National Association of Realtors. That's the sixth straight month of increases. The pending sales index is now at its highest level since June of 2007, and is 12 percent above a year ago.
Pending sales, of course, point ahead to closings scheduled within the coming two to three months. Lawrence Yun, chief economist for the National Association of Realtors, pointed to two key factors that are pushing up market activity - The near record affordability of house purchases caused by moderate prices and low mortgage rates. Plus, the icing on the cake for first time buyers -- the eight thousand dollar federal tax credit.
Meanwhile, evidence continues to mount that prices are turning around in growing numbers of markets around the U.S. Freddie Mac's most recent home price index, released last week, showed national prices up by an average 2.7 percent.
Clear Capital's home price index, which digs into thousands of Zip codes and small neighborhoods, reported even larger gains. Prices were up by 7.3 percent during the period July 27th to August 25th. That may sound exceptionally high, but remember: Clear Capital was the first to detect the earliest hints of rising prices months ago, well ahead of Case-Shiller and others.
There was more good news on the mortgage front with average rates on thirty year fixed rate loans declining to just below 5.2 percent last week, according to the Mortgage Bankers association's national survey. Fifteen year rates averaged four point six for the week. Consumer expenditures are up two percent in the third quarter compared with a minus one percent in the second quarter. Plus manufacturing output is up, and new layoffs declined last week.
Published: September 8, 2009, Realty Times |
