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Housing Market: What’s next?

October 14, 2013

The housing market has been on a hot streak over the summer. Will it last?

According to numbers from Realtor.com, the market is showing signs of moving toward normalcy after a strong rebound in many markets took home prices up dramatically and housing inventory down.

According to S&P Case-Shiller’s latest numbers which were released last month, home prices rose 12.4% nationwide from July 2012 to July 2013. That tracks with Core Logic’s data, which shows 2.5 million households regained their home’s equity in the first quarter of this year. With fewer homeowners underwater and the promise of higher sales prices, more homeowners may be comfortable listing their homes, leading to increased inventory.

At the same time, S&P Case-Schiller notes that the increase in sale prices from June 2013 to July 2013 slowed from previous month-over-month increases to 0.6%, which might signal a leveling off of buying demand. Some experts point to increasing mortgage rates, the end of the peak buying season, and the increase in inventory as potential reasons the market may begin to normalize from its feverish pace. In addition, external political and financial factors, such as the debt ceiling negotiations may come into play in the next few weeks.

For now, mortgage rates, even with the increases that have occurred since May, are still extremely low. Home prices remain competitively priced at 2004-levels, according to the FHFA index, so there are still opportunities in the market for both buyers and sellers.

Sources:

http://www.forbes.com/sites/morganbrennan/2013/09/24/rate-of-home-price-growth-may-have-peaked-says-case-shiller/

http://www.housingwire.com/articles/fhfa-home-price-index-now-equals-2004-levels

http://realestate.msn.com/blogs/post–housing-market-shows-signs-of-stability

http://online.wsj.com/news/articles/SB10001424127887323342404579077141054009338

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