Home Prices on the Rise: Watching the Affordability Trajectory

saving_to_buy_a_home_in_2016Home Prices on the Rise: Watching the Affordability Trajectory

Published by: RISMedia – April 5, 2016

Recently, one of the most closely-watched housing market indicators, the S&P/CaseShiller Home Price Indices, was released, and the numbers largely confirmed what the market has known for a while: U.S. home prices continue to climb at a moderate pace.

More importantly, there is a strong consensus among several widely followed home price indicators – including the Corelogic Home Price Index, FNC Residential Price Index, FHFA House Price Index, and S&P/Case-Shiller HPI – that prices nationwide are appreciating at a steady rate of about 5-6 percent annually amid a growing U.S. economy and low interest rates.

As another busy spring homebuying season is almost upon us, continued price growth is certainly encouraging to those who plan to buy their very first home, relocate to a different city, or simply to trade an existing home for a newer and bigger one. And, if past boom-andbust housing cycles have revealed anything about homebuying behavior, it is the fact that psychologically and economically, people prefer to buy homes when prices are rising than when they are falling.

The spring housing market appears to be off to a good start. The latest seasonally unadjusted February existing-home sales from the National Association of REALTORS indicated total sales grew 6.4 percent from a year ago. (Source: American Enterprise Institute, “Are Existing Home Sales Fizzling or Sizzling?” by Tobias Peter, March 21, 2016.) After adjusted for seasonality, sales were 2.2 percent higher than last year, according to NAR’s own press release.

Similarly, February’s new residential housing starts were more than 30 percent above the same period a year ago, of which the growth of 1-unit structure starts has been positive for 11 consecutive months now. February’s new building permits were up 37 percent from a year ago.

In 2016, home prices are expected to rise another 5-6 percent. To those who wish to participate in the rising housing market in the coming months, there is no better time to buy than now – as far as affordability is concerned. For more information, visit www.fncinc.com.

Home Prices on the Rise: Watching the Affordability Trajectory

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At HomesInTheFoxValley.com, we ready to  coordinate the smoothest transaction possible. Buying or Selling a home takes time and energy, but it’s extremely rewarding. After you’ve signed the papers at closing, all of our hard work will have paid off, and you will feel that wave of  excitement as you move in your new home, or on to your next home!

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Christopher Tenggren

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