Despite the hordes of frenzied home buyers hoping to take advantage of very low mortgage interest rates and sign on the dotted lines for their dream homes, builders still aren’t putting up nearly enough residences to appease the rising demand. There was no monthly change in the number of newly constructed homes that went under contract—54,000, […]
Chicago Real Estate Market
Spring Heats Up Housing
 |
According to a late February analysis in the Wall Street Journal, homebuilders are reporting that sales of newly built homes so far this year are going gangbusters.
But sales of existing homes are more lukewarm. Why the difference?
A simple reason could be that new-home figures are tracked on a more current basis, reporting numbers from orders in more recent weeks, versus existing home sales which often have a full month of lag time since they are tracked by the S&P/Case-Shiller Home Price Index.
Analysts also claim that there is simply less available inventory of existing homes, which has helped the new construction market.
Meanwhile, pending sales, an indicator of future closed sales, rose 1.7 percent from December to January, and are now 8.4 percent higher than the same time one year ago. January marked the fifth straight month of year-over-year gains, and the gains are increasing.
“Contract activity is convincingly up compared to a year ago despite comparable inventory levels,” said the National Association of REALTORS® chief economist Lawrence Yun. “The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth.”
A March CoreLogic report also showed that January home prices rose nearly 6 percent from a year ago. In 2013, investors were blamed for pushing prices upward, but it has been suggested that prices are rising again due simply to a lack of inventory in markets large and small across the nation. This news could result in a very competitive housing season for homebuyers.
Freddie Mac is also expecting 2015 to be the best year for home sales and new construction since 2007, according to its March 2015 U.S. Economic and Housing Market Outlook. Freddie Mac cited an improving job market, rising rents and expanded credit availability as some reasons for its positive outlook.
The Bottom Line
Low rates and new home inventory make for an exciting housing season. If you have any questions regarding housing or know of friends, family or colleagues who wish to discuss buying or refinancing a home, please contact me today.
Watch “Chicagoland State of the Real Estate Market October 2013” on YouTube
Chicagorealestateshoppe. com
Chicago Real Estate Shoppe 