The Time For Hesitation Is Past: Dive Into The Housing Market Now

Have you been considering buying a house, either right now or in the near future? Maybe you’re confused by what can be an overwhelming volume of sometimes-contradictory indicators of market conditions. Rest assured, it’s perfectly normal to want to take a wait and see attitude when conditions seem so dynamic.

We’re here to say that from our vantage point this seems to be an excellent time to jump into the housing market, whether you’re a first-time buyer, or you’re looking to trade-up from your first home, or you’re at the point where down-sizing makes sense. The housing market is showing encouraging signs of long-term vitality that should provide confidence to anyone with a stake in housing, including consumers.

Analysts who follow the housing market use a number of different metrics to assess the condition of the market and offer judgments on what that means to buyers, sellers, realtors and homebuilders. Here are the most important indicators:

  1. Median Sales Prices Are Increasing: According to the National Association of Realtors (NAR), average existing home selling prices are rising, with the average for December 2012 up 11.5% over December 2011. That’s good news for potential sellers, and a call for action to buyers. If pricing is heating up, potential buyers shouldn’t stay on the sidelines.
  2. Mortgage Rates Holding At Record Lows: Current projections expect rates to remain near historic record lows. The national averages for 15 and 30-year, conventional, fixed-rate mortgages are currently 2.70 and 3.49%, respectively.
  3. Housing Affordability Index Sets Record: Tracked since 1970, this index measures the relationship between median home selling price, median family income and average mortgage rate. An index of 100 means the median home is just affordable to a family earning the median income. That index soared to a record 194 for all of 2012.
  4. Average Days On The Market Declines: According to NAR, this new measure shows the average amount of time (in days) it takes to sell a home and includes all listings. In July 2012, NAR reported that the average time a home was listed for sale on the market was 69 days. This figure was down 29.6% from 98 days in July 2011.
  5. Home Inventory Continues To Correct: Total housing inventory has declined from last year, meaning fewer options for any home buyer. In fact, total housing inventory fell 8.5% below where it was a year ago in December 2011, with 1.82 million existing homes for sale. At the current sales pace, this figure represents a 4.4-month supply. According to NAR, limited inventory has helped maintain the upward increase in home prices.

While analysts expect conditions to continue to encourage activity in the housing market, the only projection they can make with complete certainty is that things will change in the future. So if the present is what we know for sure, there’s surely no time like the present to make the moves in housing that you’ve been considering for the past few years.

For more information, visit the National Association of Realtors for continued real estate market reports or the First National Bank-Fox Valley website. Our team of qualified mortgage banking officers is happy to help you with your home financing needs.