Washington – According to a recent report detailing housing growth for the month of March , sales of previously owned homes has risen to the highest level since September 2013. Reduced borrowing costs and a growth in the overall job market were two key factors in the continued progress in the residential real estate sector.
Figures from the National Association of Realtors revealed Wednesday in Washington showed that Closing increased 6.1 percent up to 5.19 million annually. Remarkably, economists surveyed by Bloomberg protected that sales would rise to just 5.03 million. The greatest increase has occurred since February 2014.
A number of things could be responsible for the new high – employment increases, better weather and decreased mortgage rates have all played a significant role. The combined effect of the three has unleashed pent-up demand, a timely occurrence as the annual spring selling season has just entered full swing.
A survey of eighty economists conducted by Bloomberg estimated sales to be within the range of 4.85 million to 5.2 million. In February, the pace was revised to 4.89 million from the previous 4.88 million.
The number of properties currently on the market rose 2 Million in March, up 5.3 percent from the previous month. At such a pace it would take 4.6 months for those houses to be sold, in comparison with 4.7 months as was reported at the end of February. Inventory of unsold homes also increased – up from 1.96 million in 2014.
In the news conference announcing the release of the March figures, NAR chief economist Lawrence Yun reported that, “Housing is recovering but home prices are rising too fast.” He continued, “The only way to relieve housing cost pressure is to have more supply coming onto the market.”
The market has had a number of struggles recently due to an increase in property values, which greatly effect young adult and low-income buyers who are more price sensitive.
Data from the Commerce Department last week showed that housing starts increased less than forecasted. Federal Regulators last fall adjusted mortgage rules – cutting premiums and down payments and reducing risk to lenders.
Existing home sales increased in all four regions of the US. The Midwest reported the highest growth – up 10.1 percent. The South trailed behind, up only 3.8 percent. The West and Northeast were most similar, reporting increases of 6.3 and 6.9 percent, respectively.
Sales of distressed properties such as foreclosures accounted for just 10 percent of the overall total – a decrease of one percent from the previous month. Buyers purchasing their first homes accounted for 30 percent of March Purchases. This figure is up one percent from February, according to the NAR.
The Federal Reserve is currently considering raising interest rates – something that have hesitated to do since 2006. The average rate for 30 year fixed mortgages was 3.67 percent the week of April 16, Freddie Mac reported. An increase of almost a tenth of a percent from February, the lowest in almost two years.