In a recent report by CoreLogic, their economists were very confident that the housing market will stay positive and strong. Yes home prices are up over 12% on a national level and inventories of existing home continue to be in very short supply. Increased demand, home builder confidence at a 7 year high, multiple offers still does not mean that housing is heading back to the bubble according to the report. "The fundamentals are there right now, and the market is responding," said the chief economist at CoreLogic Mark Fleming.
The key is home affordability as consumers even in the fastest growing markets continue to see historically low rates. Fleming pointed to still near-record levels of affordability as compared to the years 2000 thru 2004. He stated that for housing price afforability to return to the average levels of those years either home prices would have to rise an additional 47% or interest rates rise to 6.75%. As mortgage rates continue to rise slowly this will also lessen the chances of a housing bubble, but Fleming also believes that demand will stay strong.
"Buyers buy based upon payment, and those payments are still highly affordable relative to their incomes," he said. Historically home prices are not affected by rising interest rates and generally more affected by income and employment and therefore affordability remains strong!
Steve Lester is a REALTOR living in Allen, Texas. firstname.lastname@example.org SteveLesterHomes.net
Special thanks to Diana Olick CNBC Real Estate Reporter
Author:Seana Taylor Phone: 940-337-1821 Dated: July 18th 2013 Views: 1,733 About Seana: Seana is a native Texan and has lived all over the Lone Star State. She & her family now call Frisco...