Over the past year, mortgage interest rates remained at record lows and home prices bottomed out. As a result, demand is starting to catch up with supply, generating some measurable momentum in the housing industry.
The latest list of improving markets from the National Association of Home Builders (NAHB) indicates that the housing recovery is under way in at least parts of 48 states plus the District of Columbia.
This month the number of cities on the NAHB/First American Improving Markets Index climbed to 242, the highest number since the measure was first established. At this time last year, just 76 cities were on the list, which included 201 in December.
To be classified as improving, a city must show improvement in building permits, employment and home prices for at least six months. The latest total is about two-thirds of the 361 US metro areas that are part of the data, and the fifth consecutive month to show an increase.
When the housing bubble burst, many people put their plans to buy a new home on hold for one reason or another. Now, it appears that those who are willing to take advantage of this long-awaited uptick in the market can find good deals whether they are a buyer, a seller or both.
Just last week, the National Association of REALTORS® (NAR) reported that 2012 will probably go down as a record year for housing affordability based on its affordability index. The measure, which is calculated using median home price, family income and the average mortgage interest rate, was 198.2 as of November.
As a result, for the entire year of 2012, it is projected that the index will hit an average of 194, the highest it has been since recordkeeping began in 1970.
According to the NAR, the higher the index number, the more purchasing power available to consumers, and a reading of 100 is the point at which a family with a median income can afford a median-priced home presuming a 20% down payment.
With homes affordable and mortgage interest rates low, last year also saw the return of declining inventories at some of the hottest price points, resulting in renewed competition for homes, a trend that many predict will continue and even escalate as we head into the prime buying season this year.
Consider the fact that the Mortgage Bankers Association (MBA) anticipates new home loans will jump by 55 percent (based in dollars) in 2013. That means they expect plenty of people will be vying for the very best deals in the real estate market.
While it’s certainly true that most people traditionally think of spring as the prime home buying season, the waning winter months offer some great opportunities for buyers who want to maximize their investment ahead of the rush this year. Consider the following tips to help jumpstart your plans to buy a home in 2013 so you can benefit from this unique window of opportunity.
After doing some preliminary research on the Internet, the very best way to get started is to find a knowledgeable and trusted REALTOR®. Professional real estate agents understand our local market and can help you find all the information and resources you need to achieve your goals – ensuring you don’t miss any important steps along the way.
From navigating what can be a bit of an overwhelming process, especially for first-time buyers, to providing an expert’s eye when it comes to pricing and staging an existing home so it stands out among the competition and sells in a timely manner, a professional agent will answer all your questions and keep your deal on track from the very beginning of your search right on through to closing and beyond.
An agent can also help buyers determine a budget that’s realistic so your time is well spent looking at properties that are affordable based on how much the monthly payments are estimated to be. Plus, you’ll want to consider all your financing options.
The best way to do this is to get pre-approved for a mortgage. Similar to the mortgage application process, a pre-approval shows that you are financially ready to purchase a home. This means a bank or mortgage lender has carefully reviewed all your finances – your assets as well as your liabilities and debt – in order to determine how much money you can borrow and the terms of a loan. Doing this before you start looking provides a realistic picture of how much you can afford and also shows a seller you have the financial resources to complete a purchase.
If you’re ready to sell, your agent knows the key to getting multiple offers right now is pricing your home properly.
If you're ready to buy, get pre-approved and work with an agent to find a great home and then negotiate the best possible deal to buy it.
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