National Year in Review
January reports show that the housing sector is continuing to build up speed. Combined purchases of new and existing properties climbed to a 5.49 million annual rate last month, the highest level since November 2009, according to the median forecast of economists surveyed by Bloomberg. MarketWatch reports that existing homes are selling at their strongest pace in three years. This year showed similar signs of recovery in the Incline Village and Crystal Bay real estate market.
Record Low Borrowing Costs
Record-low borrowing costs have underpinned the gains. According to Freddie Mac, the average rate on a 30-year, fixed mortgage was 3.38 percent in mid-January, hovering near the 3.31 percent reached a month earlier that was the lowest in data going back to 1972.
As a result of the pickup in demand, the inventory of homes for sale has dwindled. There were 2.03 million existing homes on the market in November, the fewest since December 2001.
Economists at the National Association of Realtors project that purchases of previously owned homes climbed to a 5.1 million annual rate in December, the strongest since November 2009.
Outlook for 2013
The industry has a long way to go to regain full health given the severity of the housing bust in 2006. “Housing is coming back from a low base,” noted Richard Moody, chief economist of Regions Bank in Alabama. Yet there is reason to be cautiously optimistic.
Progress will probably build in 2013. The median estimate of economists and housing analysts surveyed by Bloomberg forecasts that sales of existing homes will rise about 7.2 percent to 4.98 million this year, the highest since 2007.
As Robert Dye, chief economist at Comerica Inc. in Dallas said, “The housing market is coming back, gaining momentum, and it’s one of the bright spots for the economy as we start 2013.”
We at Lakeshore are looking forward to what will come in the New Year.
Sources: WSJ.com and MarketWatch.com