A point being overlooked this Spring is that a full-fledged housing recovery will require a normally functioning real estate market and we are nowhere close to one.
The Federal Reserve is spending $40 billion each month to keep rates artificially low; the futures of FHA, FNMA & FreddieMac are uncertain; questions remain about employment and job creation, and who knows what’s happening in Washington.
It might be wise to balance the enthusiasm over rising prices and increased activity this spring with the knowledge that much of the housing market is still healing and the increase in home prices is being driven partly by scarce inventory.
In addition, rising home prices usually coincide with rising demand as more households form or people’s preferences swing toward homeownership. However, household formation is down from previous years and the overwhelming majority of these new households are choosing to rent rather than own their home.
Still Now is the Time to Buy and Sell! The optimistic homebuyer can still find a new home, in good condition, at a good value and a low mortgage rate. And the smart seller shouldn’t wait too long to put their home on the market. When the season ends and enthusiasm wanes; a rise in rates could offset their hopes of getting a better sales price.