According to a report from the Commerce Department, sales of new single-family homes rebounded in August, a sign that suggests lower mortgage rates are finally giving the housing market a boost. The jump in new home sales is the second time in three months sales have spiked above 700,000 and homebuilders are positive that sales will continue to increase. Given how sensitive the housing market is to interest rates, the improvement in sales is not surprising and should continue to inspire confidence.
Revived Optimism in the Housing Market
The housing market hit somewhat of a rough patch last year. However, this year, the economy has seen notable growth. For September, pending home sales rose by 1.5%. Compared to last year, sales were 3.9% higher this September, according to the National Association of Realtors. Despite the fact that home prices are rising faster than wages, decreased interest rates helped improve national buying power, increasing it by 6%.
These signs all bode well for the future of the housing market, which is expected to provide sustainable price growth. That said, due to the lack of supply, prices might still continue to rise since there are simply not enough homes for those who are interested in becoming homeowners. In fact, about 63% of the houses that sold in August were homes that were either still under construction or had yet to be built.
Additionally, although incomes might not be increasing at as fast a pace as home prices, unemployment rates are at near historic lows, which is another likely factor in the housing market’s recent improvements. Unfortunately, one obstacle buyers might face is their credit score. Money might be cheap, but it is still necessary to have good credit to access it.
The Bottom Line
Lower mortgage rates are certainly providing a much-needed boost for the housing market, but prospective homeowners must still focus on improving their credit score to ensure they can access the loans they need to realize their dreams.
Reach Out to a Reputable and Experienced Realtor Today!
Buying or selling a home are both major decisions. Before you make one of the biggest decisions of your life, it is crucial to plan appropriately. At Dippy Chhina, we will ensure the process is executed smoothly, efficiently and meets your goals as a buyer or seller. When it comes to a milestone as significant as this, it is crucial to work with the best. Put your trust in a realtor with a reputation for excellence. Take advantage of our knowledge, experience, and commitment to helping you buy or sell your home.