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Mortgage Rates are at historic All-Time Lows today!
Housing Market Showing Positive Signs
Harvard University’s Joint Center for Housing Studies says stabilizing home prices will boost single-family home construction throughout 2012.
The State of the Nation’s Housing 2012 report highlights several areas which suggest that U.S. housing markets are in recovery.
- Sales of homes were up 5.2% in Q1 2012 as compared to Q1 2011
- Sales of new construction homes were up 16.7% in Q1 2012 as compared to Q1 2011
- Housing starts were up 16.6% in Q1 2012 as compared to Q1 2011.
The report also found that building permits for single-family homes were up by 16.9% between Q1 2011 and Q1 2012. Building permits can be a strong indicator of home construction levels.
Echo-Boom Generation Driving Future Sales
It’s not just raw housing data that’s improving. Buyer demographics look favorable for long-term housing trends, too.
An estimated 84.7 million young adults in the “Echo Boomer” generation, the oldest of whom turned 25 in 2010, are expected to enter the housing market within the next 20 years. The Harvard study states that, as housing markets improve, more “fence-sitting” young adults will convert from renters into first-time home buyers.
Obstacles remain for the housing market overall, including a backlog of foreclosed homes. However, the report’s conclusion that concludes that “2012 will mark the beginning of a true housing market recovery” is not at all far-fetched.
Today’s home buyers face a shrinking home supply but, with mortgage rates low and lots of low down payment options available, timing could be right to buy a home. If the Harvard study is right, by next year, home values — and mortgage rates — will be higher.