Residential real estate: A closer look
Posted on Thursday, September 22, 2016 at 4:16:52 PM
Residential real estate has come back from the brink, much to the benefit of the American economy. When the housing crisis and mortgage debacle were at their heights, there was no way of telling when or if the market would bounce back. This not only impacted those who were looking to purchase a home, but those who already did and the construction industry.
Housing starts have not come close to reaching where they were right before the recession, but are slowly building. Mortgage applications have been strong this year, and refinancing activity has been unprecedentedly high thanks to historically low interest rates. This mixed bag is shifting going into the final stretch of 2017, and all current or prospective homeowners should know where they stand.
Bankrate recently provided an exhaustive analysis of the mortgage and home construction markets, affirming that a lot of change is likely on the horizon in both areas. One might think that new housing starts stalling throughout the past few years would be a positive factor for existing real estate, but this is not the case. Rather, the fact that new homes are few and far between has adversely affected the housing market as a whole.
"Inadequate single-family home construction since the Great Recession has had a detrimental impact on the housing market by accelerating price growth and making it very difficult for prospective buyers to find an affordable home - especially young adults," National Association of Realtors Chief Economist Lawrence Yun told the news provider.
Citing data from the U.S. Department of Commerce's Department of Housing and Urban Development, the source pointed out that construction starts for residential properties dropped significantly over the summer, but continues to be generally flat compared to the past three years' worth of data. Notably, housing starts are already about twice as voluminous as they were in 2010, but more growth needs to occur to truly improve the health of the market.
On the mortgage end, Bankrate stated that interest rates on 30-year fixed residential loans continued their 36-week trend of remaining below 4 percent, which bodes well for those families who are approved on a lien. Whether or not the interest rate base will rise going into the end of the year remains unclear, but most analysts are betting on a rise by the beginning of 2017.
Homeowners who are looking to sell their houses should enjoy a high level of demand given the fact that interest rates are beginning to show signs of rising, cpupled with the raw volume of applications across the nation through the end of the year. Those who are looking to purchase a home or refinance an existing mortgage will want to move quickly on those activities while the rates remain low.
As always, consider working with a local, community bank to navigate the highly complex process of acquiring and refinancing a mortgage.