The latest reports about the housing market are encouraging. Statistics generally lag one to two months behind as it can take awhile to gather data, but if the reports about March of this year are any indication, 2012 could see some real stabilizing and recovery.
According to the National Association of Realtors, existing home sales in March were down overall, but are still higher than March 2011 levels. Existing sales for this March slipped 1.1%. That’s still 3.6% higher than a year ago. It’s important to note the inventory of existing homes on the market is also down, which is a positive sign of stabilizing. The median price of a home in the South is also up 6.2% compared to March of last year.
The National Association of Realtors also said the number of Americans who signed contracts to buy homes rose in March. In its home sales report, it says sales agreements increased 4.1% last month to the highest levels since April of 2010, when buyers could still qualify for a home-buying tax credit.
Another positive factor is record low interest rates. Mortgage buyer Freddie Mac says the rate on 30-year loans averaged 3.88% this week, down from 3.9% last week. In February, the rate hit 3.87%, lowest since long-term mortgages began in the 1950s. The 30-year loan is the most common financing option for home buyers and low interest rates are helping to keep home-buying and refinancing affordable. The average on 15-year fixed-rate mortgages, popular with homeowners who are refinancing, dipped to 3.12%, from 3.13% last week. The national average hit an all-time low of 3.11% two weeks ago.
Contract signings typically indicate where the housing market is headed. More signings are among recent signs of a slight pickup in the housing market. New home sales fell in March but have risen over the past year. Pending home sales increased in March and are well above a year ago, another signal the housing market is recovering, according to the National Association of Realtors.
Builders are also more confident. The president of Brand Mortgage in Kennesaw told the Marietta Daily Journal that they are seeing more new-construction loans than last year and the first quarter of 2012 is the best they have experienced in the last three years. “We think that the foreclosure inventory has been picked through and due to the lack of inventory, new construction has started again. We are definitely seeing more applications and more closings,” he said. “We are seeing people taking advantage of low rates and more affordable home prices.” He also believes that builders are building fewer homes on speculation and are waiting to pull the permit when someone actually buys a house. The amount of building permits applied for in Cobb County’s six cities so far this year is holding steady with last year’s numbers. The city of Smyrna issued the highest amount of new building permits in March.