Existing home sales rebounded after a weak April, rising higher despite the growing prices of homes.
This means that home buyers are managing to find, and buy, homes in a tight market.
Last month, existing home sales rose by 1.1%, good for a seasonally adjusted annual rate of 5.62 million homes. This is the third-highest rate in the past year, meaning the housing market is moving about as quickly as it can.
This is encouraging data, especially since the housing market has been constrained by a lack of housing supply. Normally, existing homes make up a majority of homes on the market. The more existing homes available, the easier it is for home buyers to find homes.
With an increasing level of confidence in the housing market, home buyers are becoming more willing to purchase homes despite the high prices.
Currently, the housing market is in the middle of the busy summer buying season. As the season continues, home prices are expected to rise.
Fortunately, mortgage rates are holding low, making homeownership more easily affordable for people across the nation.
About Existing Home Sales
Each month, the National Association of Realtors (NAR) tracks the number of homes sold. The existing home sales report is part of this, and it tracks all homes that are not newly built. This includes houses, townhouses, co-ops and condos.
In May, the total number of existing homes on the market rose, a positive sign for home buyers. But home buyers were buying houses quickly.
In fact, the average home stayed on the market for just 27 days, the lowest level since the statistic started getting tracked five years ago. This is down from 29 days in April.
Popular urban regions saw homes leave the market even quicker. In the Seattle-Tacoma area, homes were on the market for an average of just 20 days. In the San Francisco area, homes were on the market for an average of just 24 days.
This is also combined with the rising costs of buying a home. The median cost for a home was $252,800, the highest mark ever recorded.
While homes continue to grow in popularity, there’s a good chance that they will rise in price and leave the market at a quicker pace.
Those that are serious about buying a home will need to get the pre-approval process started so they won’t miss out on housing opportunities.
Home Prices Hit New High
On average, homes are now worth more than they ever have been. But this doesn’t mean it’s impossible to afford a home.
One reason home buyers continued to purchase homes was because of their confidence in the economy. The job market, in particular, has been a positive part of the economy, growing at a healthy pace.
As jobs continue to get added, the average wage rate has been rising to meet the demand for labor. Because of this, many home buyers are finding that their rising wages will help them afford homes more easily.
Some home buyers are also getting clever with their mortgage options. Many mortgages don’t require downpayments of 20 percent or higher, contrary to the widespread belief.
For example, FHA loans require a downpayment as low as 3.5 percent, and home buyers with credit scores as low as 580 can get approved.
Homes are only going to get more difficult to find because of the national housing shortage. This might not seem like an ideal time to buy a home, but it could be difficult to find any homes for a sale in a just a few years.
Current Mortgage Rates
Mortgage rates were rising through the beginning of 2017, but they have recently dropped to much lower levels.
Also, current rates are much lower than they have been historically. Rates are expected to rise throughout the year, so keeping track of rates could help when looking to buy a home.