Housing Market Likely Best Since 2006

With 2015 nearing the midway point, housing trends are indicating that this year could mark the best since the height of the real estate bubble in 2006. New and pending home sales were up 26% and 14% respectively in April compared to last year. In fact, home sales are expected to reach nearly 6 million, on par with the first year of decline in 2007. However, the numbers being seen now are indicative of another bubble. According to realtor.com's Jonathan Smoke, this year's market is being driven by the more than 3 million jobs created in the last 12 months. Of those, more than 1 million have been in the 25- to 34-year-old age range, where most first-time home buyers fall.

The volume of homes sold isn't the only good news for housing in 2015. Indeed, homes are also selling significantly faster, with an 8 day decline in average time on the market this year compared to last year. This huge demand has created a supply shortage, with 32 straight months of less than a 6 month supply of housing inventory. As a result of this limited supply, home prices have surged, with year-over-year median home price appreciation reaching 9% in April. Meanwhile, the price of renting has risen even faster than home prices, further driving housing demand.

While rising prices could hurt market growth if it were to continue, this is unlikely thanks to concurrently rising mortgage rates, which just recently rose over the 4.0% mark. Mortgage rates are expected to continue to rise in the near-term. What does that mean for you? If you are thinking of buying a home, now is the time to do it!

Source: Midyear Report: The Housing Market Is on Track for Its Best Year Since 2006 (and It Ain’t a Bubble)

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