There are plenty of people that worry about the state of the housing market in the United States. The housing market affects different people on different levels. Some depend on the housing industry for employment. Other people are worried about getting a return on an investment they made on a home in the past. There are groups of people that wonder if now is the time to buy a home or would they be better off renting a home. There are many reasons to worry about the housing market and that is why there is so much information being written about it.
The state of the housing market can be broken down into several areas. These include the sales of homes, the construction of new homes and the interest rates of mortgage. In order to understand how the housing market is doing, you have to look at all three areas.
Sales of Existing Homes
During the height of the real estate boom, houses were selling like hotcakes. You could get a premium price on any home you owned because of the demand that there was. When the bottom of the market fell out, the sales of existing homes also slowed. Homes would sit on the market for a lot longer and the price they could get was much lower. Over the last few years the average price of homes has risen slightly, but it really depends on where a home is. Many homes have still not gotten back to the value they had before the real estate bust, but they will get there eventually. The amount of time it takes to sell a home is also decreasing and homes that are priced well and presented in the right way can still sell quickly.
Building of New Homes
At the height of the real estate boom, the sales of new homes were never higher. When the market fell, no one needed a new home and construction of new homes stopped as the supply of homes in the market was much higher than the demand. In 2012 the construction of single family homes increased a little less than 3% over the previous year. That trend is expected to continue and should increase even more in the future.
The Mortgage Rates
The mortgage rates and the availability of money for people to buy a home is a reflection of the housing market. For the past several years the rates have dropped and people have been able to obtain mortgages for as low as 3% APR. That makes home more affordable for everyone to buy. It also is easier than it used to be to get a mortgage although it is still not as simple as it was 10 years ago.