Friday, August 23, 2013
August Real Estate Pulse: Existing Home Sales Spike in July 2013
Since 2009, existing home sales have never been so high. July 2013 recorded and increase of 6.5% in comparison to June of the same year. A seasonally adjusted annual rate of 5.06 million in June went up to 5.39 million in the month of July. This indicates a double-digit year-over-year increase in the real estate market. The median price for existing homes was $213,500 in July which was 13.7 % more than in the previous year at the same time. Also, 15% of the July sales were distressed homes foreclosures and short sales which indicated the lowest share since October 2008. “The size of the increase was a surprise,” given the number of people applying for mortgages has dropped sharply since rates began to rise in early June, said Patrick Newport, an economist at IHS Global Insight.
The increasing mortgage rates also play a big role in this. According the Freddie Mac, “fixed-rate mortgage rose to 4.37% in July from 4.07% in June; being the highest since July 2011. Despite the fact that the interest rates on mortgages are on an upswing, the real estate market is clearly indicating that we are heading towards a positive future. Moreover, Lawrence Yun, NAR chief economist, believe that “Mortgage interest rates are at the highest level in two years, pushing some buyers off the sideline. The initial rise in interest rates provided a strong incentive for closing deals”. As new jobs are being added to the economy and the mortgage underwriting standards are going to become more buyer-friendly, the economy will continue to rise and so will the housing market. There will be more qualified buyers which will ensure that the increasing inventory will be provided with enough demand.
What does this mean for normal consumers? The recovery of the housing market is responsible for a stronger overall economy. The fact that people are spending more by buying homes is supporting consumer spending and increases the confidence of homebuilders and buyers, and partially avoids foreclosures. Also, as the homebuilders watch the continuing signs of recovery, they are starting to build more in new construction and new communities in order to satisfy the big demand on the market.
Here at SI Real Estate, we will work with you to meet any of your real estate needs. From buying your first house or selling your home, investments or property management, with any builder on new construction, our team offers its years of experience in the Tampa Bay area to ensure that you will be represented in the most respectful and efficient way. Our team of trusted real estate professionals will not be finished until you move into the property of your dreams. Real people | Real Results!