Though the housing industry is still facing challenges, there are several bright spots that can be found in different regions throughout the country. For example, a CoreLogic study showed August home prices increasing in 12 states and Washington DC by up to 9 percent (West Virginia). And our comprehensive market analysis system, Local Housing Data, shows positive movement in overall unit sales in the northeast.
Though average sales prices seemed to settle a bit compared to the 2nd quarter, unit sales were up by as much as 15.5 percent in the third quarter. This shows a pickup in demand, likely due to a combination of historically low interest rates and low home prices. It is also positive to see the number of home sales increasing year over year, despite the elimination of the homebuyer tax credit last year. The table below lays out major market indicators for the northeast.
As mentioned before, mortgage rates are near historic lows, though they did spike last week. The 30-year FRM averaged 4.12 percent at the end of last week vs the prior week, when it averaged 3.94percent. A 15-year FRM averaged 3.37 percent up from the prior week when it averaged 3.26 percent. This uptick was likely related to a better than expected employment report for September.
Without a doubt, we are still in the midst of a buyer’s market. Extremely low prices and low interest rates remain wonderful incentives for homebuyers-there really hasn’t been a better time in recent history to purchase a home. In fact, as the Wall Street Journal recently stated: “It’s an excellent time to buy a house, either to live in for the long term or for investment income…Houses aren’t the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.”
We would like to make a note to sellers, however. Due to the robo-signing controversy last year, you may have noticed that foreclosure numbers are dropping. Investigations were led into lender and foreclosure procedures, slowing down the overall processing times. However, there have been numerous predictions from major financial and real estate institutions, such as Standard & Poor, JP Morgan and Barclays stating that a glut of foreclosures, due in the coming months, will push prices down by another 6 or 7 percent. As a seller, you don’t want to have your home on the market when this happens. Sell now to avoid losing too much equity in the future.