2012 Marked TheYear Of The Housing Recovery: Promising Signs For More Improvement In 2013
The nation’s housing market has certainly come a long way from the depths of the recession. According to the National Association of Realtors® (NAR), in 2008 home sales had fallen nearly 42 percent from their peak level in 2005. Moreover, foreclosure filings had jumped more than 80 percent. But today, the housing market is showing signs of gaining momentum.
As 2012 comes to an end, the number of foreclosures continues to decline and both home prices and sales continue to recover across the country as well as here in Colorado. In fact, in some communities there are not nearly enough homes to meet buyer demand, and it is not unusual to see multiple offers with final sales over the asking price.
NAR has reported that October home sales in the U.S. were 10.9 percent higher than a year ago. This marked the seventh straight month that the nation’s housing market saw improvement year-over-year, the first time that’s happened since November 2005–May 2006. Median home prices in the U.S. also rose 11.1 percent from a year ago. And in some of our markets, prices and sales have been even stronger than that.
These statistics do not mean that we are completely out of the woods. The nation’s housing sector still faces some challenges, including a tepid economic recovery, high unemployment levels, the prospect of higher taxes in 2013 if Congress cannot avoid the “fiscal cliff,” and the threat that the mortgage interest deduction could be reduced as part of budget negotiations.
But despite those potential potholes, we appear to be on the road to recovery and many industry analysts believe we will pick up speed in 2013 and beyond.
According to NAR Chief Economist Lawrence Yun, the steady housing market recovery is expected to continue over the next few years, barring further tightening of mortgage credit availability or the potential of sharply higher taxes and automatic spending cuts on January 1st if Congress fails to reach a compromise on revenue and expenditures by year-end.
Yun reports that, “Existing-home sales, new-home sales and housing starts are all recording notable gains this year in contrast with suppressed activity in the previous four years, and all of the major home price measures are showing sustained increases.”
While mortgage rates have been at historic lows, Yun expects these rates to rise to an average of about 4.0 percent next year and 4.6 percent in 2014.
With rising demand and shrinking inventory, Yun foresees meaningfully higher home prices. He predicts that the national median existing-home price should rise 6 percent to $176,100 for all of 2012, and increase another 5.1 percent in 2013 to $185,200 with a similar increase in 2014.
According to the UCLA Anderson quarterly forecast released earlier this month, the U.S. housing market should be a major driver for the nation’s economy over the next two years – a change from past years when housing trailed other sectors.
The Housing Market Has Certainly Come A Long Way In 2012
January 15, 2013 by Leave a Comment