How We’ll Avoid Another Recession

The economy may be showing signs of slowing lately, but the housing market is likely to keep its positive momentum rolling, writes Lawrence Yun, chief economist for the National Association of REALTORS®, in a new column for Forbes. In fact, he predicts that it will be housing market gains that enable the overall economy to avoid a recession.

Indeed home sales, construction, and prices have all been rising and are expected to continue to increase. Over the last year, existing-home sales have risen 7.9 percent; new-home sales are up 17.7 percent; housing starts have risen 12 percent; and the median price of sold homes is up 6.4 percent (all along on a year-to-date basis).

The main reason behind the gains is a rising population, Yun notes. At the turn of the century about 282 million people were living in the United States, but that number has jumped to 322 million today. Taking into account births and deaths and international immigration, about 2 to 3 million additional residents arrive in America every year.

“As long as Americans believe in the American Dream of steadily moving up the economic ladder – from renting to a starter-home to a better home to eventually a retirement comfort home – there are plenty of legs in America that will be moving around in the upcoming years to further boost the housing market,” Yun writes.

Source: “Housing Will Still Expand Despite Economic Weakness,” Forbes (Oct. 26, 2015)

Good News to Buyers: ‘Affordability Improves’

Low interest rates are helping to boost housing affordability. Nearly 67 percent of new and existing homes sold between January and the end of March were affordable to families earning the U.S. median income of $65,800, according to the latest National Association of Home Builders/Wells Fargo Housing Opportunities Index.

The national median home price fell from $215,000 in the fourth quarter to $210,000 in the first quarter. Meanwhile, average mortgage rates dropped from 4.29 percent to 4.03 percent in that time period.

“Now is a great time for consumers to buy homes,” says NAHB Chairman Tom Woods. “Both first-time and move-up buyers can take advantage of these favorable market conditions and start building their American Dream.”

Source: National Association of Home Builders

2010 “A Year of Contrasts” in Real Estate!

This has been a year of real estate contrasts: While many consumers have taken advantage of historic buying opportunities and the market has seen a gradual stabilization of sales and prices, other challenges facing the nation have led some to question the value of home ownership for families, communities, and the country.

“People are passionate about the American dream of home ownership, and this passion underscores how important home ownership is to our nation,” says National Association of REALTORSÒ President Ron Phipps. “Owning a home has long-standing government support in this country because home ownership benefits individuals and families, strengthens our communities, and is integral to our economy. As we begin a new year, REALTORS® remain committed to ensuring that our public policies promote responsible, sustainable home ownership for all of our futures.” 

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“Americans still aspire to be homeowners”

Americans—both current homeowners and renters—still strongly aspire to own a home and to maintain homeownership, despite a slow recovering housing market, according to a study released by Fannie Mae.  However, demographic trends combined with financial caution among consumers are contributing to an increased willingness to rent. 

More than half (51 percent) of current homeowners and renters say that the housing crisis has not affected their overall willingness to buy a home, according to the study. However, while homeownership aspirations are high for the long-term, Americans have near-term doubts about buying.

Overall, according to Fannie Mae’s National Housing Survey third quarter results, one-third of Americans (33 percent) would be more likely to rent their next home than buy, up from 30 percent in January 2010. Among renters, 59 percent said they would continue to rent in their next move, compared with 54 percent in January 2010.

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