Bensalem Real Estate Housing Info

Real Estate Agent with Citizens Premier Real Estate
  Eric A. Lee
Bensalem Real Estate
2864 Street Road
Bensalem PA 19020-2651
Home Page:
Phone:: (215) 671-4700 Ext 1110
Mobile:: (215) 638-4880

After months and months of gloom-and-doom reports about the housing market, the latest month has finally started to produce evidence of some positive movement. Yet there are still plenty of economists out there forecasting a seemingly endless downturn for the weakened U.S. housing and mortgage markets. Where does the truth lie? Are things really that bad, or really that good? The answers are unclear but several new reports give definition to the many facets of the situation.

Freddie Mac: No Price Recovery Until 2011

Chief economist for government-backed mortgage giant Freddie Mac spoke to the National Economist Club in Washington D.C. on April 2 and proclaimed that though there are a few signs of healing in the housing market, home prices will continue to drop through 2010. "It'll be 2011 before we see any improvement or increase in these national U.S. house price measures," he said.

Nothaft also concluded that the housing market will remain on it weakening course for at least the next several months as foreclosures continue to rise and unemployment number soar.

The current market suffers from an overload of inventory, and roughly 40 percent of the current supply are foreclosed homes. These homes distort the median selling price and the true value of the properties.

He did try to add some positive spin on the outlook saying, "the good news is low mortgage rates," speaking of the record lows on long-term mortgages charted in the past month. "That will help to promote affordability for home buyers and provide refinancing opportunities for many owners who have loans," Nothaft added.

Mortgage Applications on an Upward Swing

And those low rates are having the desired effect on mortgage applications. The Mortgage Bankers Association has reported that its weekly application index has increased during each of the past four weeks. During the week ended March 27, the index was up 3 percent, led heavily by homeowners interested in refinancing out of the current loans. Almost 80 percent of all mortgage applications were for refinance loans.

In addition, while it is true that most of the current applications are refinance requests, home purchase applications are still being filed, especially by plenty of first-time home buyers seeking to take advantage of low interest rates and government tax incentive programs.

Pending Home Sales Up

According to the National Association of Realtors, home sales are increasing as well. The group's pending home sale index for February rose by 2.1 percent over January, although current figures are still down over the fourth quarter of 2008.

'More buyers are getting into the market to take advantage of stimulus incentives and much improved housing affordability conditions, but it will take a few months before we could see this turn up in measurable sales contract activity,' said NAR chief economist Lawrence Yun.

And the NAR index of housing affordability actually rose to a new record high in February, measuring 36.3 percent higher than this time last year.

Therefore, the market state is currently as follows: Homes are more affordable, interest rates are lower and there are plenty of choices for prospective buyers. Yet unemployment remains at higher-than-normal levels, making it difficult for many to capitalize on the incredible buyers market. Job creation may have to increase significantly before the full housing correction can be made.

Comments (1)

Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

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