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Housing Market Continues Gaining Steam Through Close of Q4

Thursday, December 20

While confidence in the housing market has made a rebound since the close of Q3, it seems that sector recovery is continuing through the end of the fiscal year. Investors are naturally concerned about false stop-starts in the housing market, and with the disappointing fluctuations we’ve become accustomed to since the 2008 crash, market skepticism is understandable. Taking all this into consideration, we may be looking at a genuinely enduring recovery period.

 

To examine the market specifics, the sum of single-family home starts has increased roughly 25% from that recorded in FY2011. As USA Today reports, the adjusted volume of home sales from last year was effectively the lowest in the last half-century. The article further details that projection from the National Association of Home Builders forecasts FY2013 to return a 35% increase on the volume of home starts over this year as well. Nationally quantified, it seems we’re watching a mounting rise in single-family home purchases, which bodes well for the health of the housing sector.

 

There is a spread of demographic motives that may be spurring convalescence in the housing market. After the 2008 market crash, many prospective homeowners otherwise withdrew from the housing search or delayed purchasing altogether. The ‘freeze’ in purchases only managed to prolong woes in the sales field, but the nationwide return in consumer confidence is encouraging a bulwark of previously hesitant homebuyers to reconsider property buys. In tandem with this, major banking players are reporting a dip in mortgage defaults, bolstering the overall health of their lending capacities.

 

Another primary factor that will continue to motivate home purchases is the historic low of national interest rates. As I’d previously written in a post for The Niche Report, certain Federal Reserve policies may be actively beneficial for the housing market. Not only did Q3 disclosures from banking and lending players point towards health in the housing market, but the nationwide increase in home closings (and the dip in foreclosures) are validating that Federal Reserve policy may be spelling positive returns for the real estate sector in the immediate.

 

In collating the myriad relevant factors, the immediate outlook of the U.S. housing market seems broadly positive. Low interest rates make the opening of home loans more appealing, and a home buying public that has waylaid itself throughout four years of economic quagmire is slated to collectively return to property purchase. In addition to mounting confidence among U.S. homebuyers, foreign finance players are investing in American real estate as well, largely out of conviction that our property investments now represent growth holdings. While predictions beyond next year would likely be premature, current market factors point towards a healthy year for housing in FY2013.

 


Harrison Stowe is a writer for NVR Inc., one of the prime homebuilders in North Carolina. Addressing a range of real estate topics including investment, mortgages, and new construction, Stowe combines finance knowledge with additional experience working with Ryan Homes in the current real estate market.


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