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Real Estate Market
March 2016: Existing Home Sales Report
Nationally, sales of existing homes inched ahead in January, hitting the highest annual level in six months. According to the National Association of Realtors®, below-average housing inventory levels propelled price growth to the swiftest increase since April of 2015.
Total existing-home sales (transactions for single-family homes, townhomes, condos and co-ops) moved slightly ahead by 0.4% to a seasonally adjusted annual rate of 5.47 million in January from a downwardly revised 5.45 million in December. Sales are now 11.0% above 2015.
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NAR's chief economist, Lawrence Yun, said that existing sales launched 2016 solidly, rising slightly to the fastest pace seen since July 2015 (5.48 million). Yun noted, "The housing market has shown promising resilience in recent months, but home prices are still rising too fast because of ongoing supply constraints," adding that, "despite the global economic slowdown, the housing sector continues to recover and will likely help the U.S. economy avoid a recession."
Housing Data Takeaways
- January's median existing-home price (all housing types) was $213,800, a gain of 8.2% from January 2015 ($197,600). Last month's price increase represents the 47th straight month of year-over-year advances.
- Total housing inventory at January's end grew 3.4% to 1.82 million existing homes for sale, but it's still 2.2% lower than a year ago (1.86 million). The inventory of unsold homes is now a 4.0-month supply at the current sales pace, a minor gain from 3.9 months in December.
- Sales of single-family home grew 1.0 percent to a seasonally adjusted annual rate of 4.86 million in January, up from 4.81 million in December. This is 11.2 percent higher than the 4.37 million pace one year ago.
- January's median price for existing single-family homes was $215,000 up 8.3% from 2015; the condo price was $203,900, up 7.4% over 2015.
- Sales to first-time buyers stayed at 32% in January for a second straight month, a rise from 28% a year ago.
- Freddie Mac's data shows the average commitment rate for a 30-year, conventional, fixed-rate mortgage remained under 4 percent for a sixth straight month, and fell in January to 3.87 from 3.96 percent in December. For 2015, the average commitment rate was 3.85 percent.
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Your credit score is a composite snapshot of your credit history. A high credit score takes time to cultivate, and is not likely to rise much in a short period of time. Generally speaking, you want to make sure you pay your bills on time, keep outstanding debt levels to a reasonable amount for each account, and avoid closing accounts you've successfully paid-off and managed. Don't lose hope if you have less than perfect credit, there are still good loan programs out there for responsible borrowers. We have a list of preferred local lenders who can help you find the best financing programs for your specific needs.
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Investing in Real Estate
Today's low interest rates and stabilized home prices have created some great investment opportunities! Investing in real estate has unique advantages over other types of investments:
- Interest in mortgage loans are tax-deductible. Investors can lower their tax liability while increasing their equity.
- Renters pay down your mortgage loan. Investors reap the benefits of rental income, which offsets your mortgage cost and build equity.
- Real Estate values increase over the long term. Real Estate is limited and will always be in demand.
- 1031 exchanges are available to defer taxable income when you are ready to sell.
Many investors are taking advantage of these great market conditions. Have questions? Give us a call. We are happy to help!