The economy still has to hit the escape button from the effects of the last financial crisis. And the housing market could propel it forward.
All throughout the country, the demand still remains high. Mortgage rates are still at an all-time low. This drives more consumers to consider home buying or refinancing their current loan.
More Borrowers Paying Off Sooner
Prepayment Speed, a good indicator for refinancing activities, rose 20 percent higher in March 2017 compared to February of the same year. This number, however, is still 26 percent behind last year’s level.
When mortgage rates fall, borrowers take advantage and refinance their loans. By doing so, they pay off their loans earlier than expected.
More people with Jobs, Creating Robust Housing Demand
The U.S. Bureau of Labor Statistics reported a 4.5 percent decline in the unemployment rate in the month of March. While the retail industry lost jobs, nonfarm employment is booming the professional, business services and in mining. The total nonfarm payroll increased by 98,000.
This job growth can be a key predisposing factor for the steady increase in the number of sales for houses. Tenx Chief Marketing Officer Rick Sharga said that Florida’s housing is recovering really well on an economic perspective.
First Quarter 2017 Still Shows Positive Housing Market Health
While the housing demand is generally high for the whole nation, its recovery isn’t on an even landscape.
The first quarter of 2017 was still seen with positivity. The present national Leading Index of Healthy Housing Market (LIHHM) maintained a positive figure at 105.0. Despite this, the reading is at its lowest in four years.
Job and income gains keep the housing sales afloat, but the rapid increase in house prices are putting its toll on affordability and sustainability of homeownership. The current house price appreciation is well above average in the long -term demographics, making it hard especially for first-time homebuyers to afford a home.
Healthier trends are observed regionally. LIHHM shows positive findings in many Metropolitan Statistical Areas. This can result to more sustainable expansions to more areas in the coming year.