Continuing declines in mortgage rates and signs of home price pick-ups dominate this week's economic outlook for real estate.
Fixed-rate thirty year mortgages averaged slightly over 5 percent last week, according to the Mortgage Bankers Association. Fifteen year rates averaged 4.6 percent.
Both numbers are close to all time lows, and are buyers are getting the message.
New applications to buy houses and condos jumped by 9.4 percent last week alone. Refinance applications were double that - up by about 18 percent.
At the same time, the home price index that tracks more zipcodes and neighborhoods than any other -- the Integrated Asset 360 index -- found that prices nationwide moved up by 1.6 percent in May, based on data from more than 15,000 sub-markets.
IAS said the increase in prices was the largest recorded by the index since July of 2005. Prices in Denver were up by four tenths of a point. In Boston by 3.7 percent. And Chicago by one and a half percent.
John Burns, CEO of John Burns Real Estate Consulting, said the higher prices appear to be the result of purchasers "shifting back to more traditional submarkets and neighborhoods," and moving away from zipcodes and neighborhoods where prices have been severely depressed by foreclosures.
Another national survey, by House Hunt, Inc., found a trend underway toward move-up buyers and away from first timers. While move-up purchasers represented just 35 percent of the market during the first quarter of this year, according to House Hunt survey researchers, in the second quarter they accounted for 48 percent.
Why's that significant? Because the "normal" market ratio in recent decades has been two-thirds of purchasers are move-up or down-sizing buyers, and one third are first timers.
Michael Bearden, CEO of House Hunt, which polls realty agents across the country, said the return of move-up buyers -- who tend to be less focused on distressed and foreclosed properties at rock-bottom prices -- "is very positive news for home owners, sellers and the housing industry."
The same study also found that 81 percent of sellers are now getting at least 90 percent of their asking prices, reflecting more realistic pricing strategies by sellers and agents.
So are we at a turnaround point for real estate? Maybe on a national basis, but definitely not in dozens of markets where prices are still slipping because of rising foreclosures and unemployment.
But let's not ignore the bright spots: For thousands of consumers, today's outstanding mortgage rates and improved affordability are making the word "turnaround" look very real and meaningful.
K. Harney
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