Many consumers across the country have been struggling with the housing market, either because they want to buy and can’t get a mortgage, or because they want to sell but home values aren’t high enough to cover their underwater mortgages. However, new trends in the market may be helpful to both buyers and sellers.
During the month of August, the number of existing-home sales rose appreciably on both a monthly and year-over-year basis, as did the average price for this type of property, according to new data from the National Association of Realtors. For buyers, the sales of existing homes — which includes single-family units, condominiums, townhouses and co-ops — climbed 7.8 percent on a seasonally-adjusted basis to 4.82 million, up from July’s 4.47 million. It was also a more significant increase, of 9.3 percent, from the 4.41 million observed during August 2011.
Meanwhile, the median price for those properties climbed in August as well, rising 9.5 percent year-over-year to $187,400, the report said. It was the sixth consecutive month of annual increases, the first time that has happened since the period between December 2005 and May 2006, prior to the housing bubble’s burst. Further, the increase seen last month was the largest since January 2006, when median prices climbed 10.2 percent.
These trends are encouraging to experts, who believe that there will be continual improvements in the housing market over the next several months at least, the report said. In fact, many believe that the increase in prices and sales could have mutually beneficial effects on each other at least through the end of next year.
“Total sales this year will be 8 to 10 percent above 2011, but some buyers are frustrated with mortgage availability,” said Moe Veissi, president of the NAR and broker-owner of Miami-based Veissi and Associates Inc. “If most of the financially qualified buyers could obtain financing, home sales would be about 10 to 15 percent stronger, and the related economic activity would create several hundred thousand jobs over the period of a year.”
The Federal Reserve Board has already committed to keeping interest rates, particularly on mortgages, at around their current low levels for some time, and as a consequence, that could encourage more people who are thinking about buying to look into how affordable the process might be for them.
Image: David Neubert, via Flickr