Positive Real Estate Market Trends

The chief economist for the National Association of Realtors, Lawrence Yun, is predicting a strong market in four of the next five years, based on the following confluence of positive trends. After a slow start this year, partly due to the frigidly cold winter, home sales are picking up steam. Existing-home sales have risen for four straight months and in July were at the highest pace of the year, 5.15 million. Pending contracts point to more gains, too.

• Job growth is a plus 2,600,000 in the past 12 months
• Mortgage rates have stayed low even after the Fed started talking about tightening monetary policy
• Inventory levels are increasing
• New home construction is on the rise
• Distressed properties are at their lowest levels since 2008

All in all, the housing market is steadily improving, and growth potential remains strong thanks to continuing pent-up demand. For these reasons, they are forecasting growth in four of the next five years. (The one down year simply reflects the reality that data never moves in a straight line in any direction.) Look for annual sales to reach well beyond the 5 million mark in the near future.

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