Home prices are crossing the line again. After an epic housing crash, where values plummeted nationally by almost 35 percent, the nation is seeing new highs again. The median price of an existing home sold in May hit a record $239,700, according to the National Association of Realtors, which began tracking prices in 1968.
“We are seeing flashing yellow lights on affordability. People who are currently renting and want to convert into ownership — major difficulty,” said Lawrence Yun, chief economist of the NAR. “Home prices are rising way too fast compared to people’s income and wage growth.”
In a separate report, however their is some hope. Perhaps due to Brexit, financing costs for mortgages are now at 3 year lows.
Total mortgage application volume increased 2.9 percent last week on a seasonally adjusted basis from the previous week. Applications are now nearly 35 percent higher than one year ago, when rates were considerably higher, according to the Mortgage Bankers Association.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since May 2013, 3.76 percent, from 3.79 percent, with points increasing to 0.33 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio loans.
The evidence is in the high sales reported by the National Association of Realtors.
Existing home sales for May 2016 released by the National Association of Realtors
U.S. home resales rose in May to a more than nine-year high as improving supply increased choice for buyers, suggesting the economy remains on solid footing despite a sharp slowdown in job growth last month.
The National Association of Realtors said on Wednesday existing home sales increased 1.8 percent to an annual rate of 5.53 million units last month, the highest level since February 2007.
April’s sales pace was revised down to 5.43 million units from the previously reported 5.45 million units. Economists polled by Reuters had forecast sales rising 1.1 percent to a 5.54 million-unit pace in May.
The strong home resales added to retail sales data in painting an upbeat picture of the economy. That should help allay fears about the economic outlook which were stoked by last month’s paltry job gains.
The market is constantly changing. sometimes up, sometimes down. These swings tend to be even more pronounced for commercial and Investment real estate. That is where a professional Appraiser comes in. We strive to be on top of current trends and up to date on all valuation specifics.
Within Minnesota, your best bet when you need a solid appraisal on Significant properties iw with Minnesota Real Estate Appraisal Services