Don’t Miss the Housing Boat
While levels of unsold homes remain at record highs, there are some bright spots shining through. According to the National Association of Realtors (NAR), the drop in home values has finally hit a point that is starting to spur more sales. The Pending Home Sales Index, which is a forward looking indicator based on home contracts signed in December was actually up 6.3% over November and is up 2.1% over December 2007. These numbers are fueled by contracts signed in areas that have seen the largest increase in housing affordability.
The NAR’s Housing Affordability Index, which shows a relationship between home values, mortgage rates and family income, rose to an all time high in December, indicating that home affordability is peaking. For those sitting on the sidelines waiting for a sign to buy a home, here’s your sign. Since 1970, when the NAR starting started tracking housing affordability, there has been no other point in time when housing affordability has been this high.
Pending Home Sales Show Healthy Gain [KnowledgePlex]
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