Recently, there have been mixed opinions about the state of the housing market. While one could argue that now is a good time to buy real estate, this statement mostly assumes that things won’t get worse, and they certainly could. Many experts believe 2013 will be a good year to be a seller because there are fewer homes on the market, propping up prices, and mortgages are more easily available.
The data from the S&P/Case-Shiller Home Price Indices showed home prices rose 4.5% for the 10-City Composite and 5.5% for the 20-City Composite in the 12 months ending in November 2012 (download the C-S report US Housing Market Data). This price increase signals the largest 12-month advance since 2010.
It is interesting to note that the 20-City Composite saw a drop in housing prices in New York City but increases in all 19 other areas. This bodes well for myself and many of my fellow W&L students who are looking for apartments in the city over the next few months. Also, the Phoenix region even saw over a 30% increase in housing prices, bringing much optimism to an area struck particularly hard by the 2008 recession.
An important factor that underlies the appeared successes of the housing market are the incredibly low mortgage rates. These low mortgages rates, especially when prices approach normal levels, make buying a house much more attractive and affordable to US consumers. Unfortunately, there is much uncertainty in the market due to the government-backed nature of many of these mortgages. Only time will tell what this uncertainty could do to the market and if these marked improvements will remain.
3 Comments
Are there any indices or other indicators of the housing market that you would suggest examining?
Unfortunately, if you’re moving to metro NYC, here’s another piece of data: rental rates from the Consumer Price Index.
This makes me happy I am not looking for an apartment in NYC! Living in Lexington has spoiled me with extremely low monthly rent and I know others living here feel the same. With the recent trend in housing prices and the state of the economy, college graduates have had to go to more extreme measures. Of my 9 first cousins who graduated college in the last two years (I have a lot of cousins) 7 of them are living with 4 or more other people. This summer in Manhattan I shared an apartment with 5 other girls and 1 bathroom. You could not open the fridge or any closet door all the way without running into another item of furniture. Even if housing prices do begin to improve this year, I doubt the improvement will be very substantial. Even though “many experts believe 2013 will be a good year to be a seller because there are fewer homes on the market, propping up prices, and mortgages are more easily available,” with the uncertainty surrounding the housing market, I do not think these sellers will find many more buyers.
Comments are closed.