rates, more people are continuing to approach buying a
home
New home sales have reached a five year high during
July across the United States, silencing any doubt that the active
Spring Market would slow during the summer months. With the first
half of 2013 having performed exceptionally well, the reports of
Julys successes has only lifted the expectations for the Third
Quarter and rest of the year in the real estate industry to another
level.
Despite mortgage rates rising, there has been no
inkling of the demand faltering in the marketplace in the
slightest. In fact, according to the Commerce Department,
single-family homes just increased in sales by 8.3% up to a
seasonally adjusted annual rate of 497,000 in July. This, as it
comes to be known, was the highest mark since May of 2008. As it
turns out, this figure far and away exceeded expectations for July
as economists submitted an estimate of there only being 482,000
single-family home sales during that same time. These better than
expected numbers can be attributed to the assumption that buyers
actively approached the market simply in fear of mortgage rates
rising any further. Bob Walters, the Chief Economist at Quicken
Loans, commented on this by stating, “The recent increase in
mortgage rates hasn’t slowed demand as long as home affordability
remains high. We are, however, seeing an increased urgency from
potential new home buyers as they move to secure today’s
historically low rates.”
While July has proven to be incredibly resilient in furthering
the real estate recovery nationwide, June was also just as
praiseworthy. Only last month it was found that there was a 38.1%
annual increase in single-family home sales between June of 2013
over June from 2012. This, as it turns out, was the most dramatic
percentage change on an annual basis since January of 1992 over the
same corresponding month from a year prior. It appears as though
the real estate climate is in a healthy state. While mortgage rates
have gone up by 0.53% recently, they are still far below where they
have been by historical standards. Compared to where rates have
been in years past, the Fed Chairman Ben Bernanke and other
economists agree that the housing sector is stern enough to
withstand a slight uptick in borrowing costs, thus prolonged growth
in the real estate industry is only set to endure.
More Information: New York Times