Housing Market Is on its Way Towards a Full Recovery
One of the key indicators that the housing market is on its way towards a full recovery post-Recession is house prices. House prices reached “bubble status” pre-Recession and was the partial cause of the entire crash of the mortgage industry during the crisis because buyers found themselves living in homes with loans that vastly exceeded
the appraised value of the home. House prices must maintain a delicate balance as the ebb and flow of the housing market dictated by new home and existing home buyer supply and demand raises and lowers pricing year-over-year.
The House Price Index (HPI) reported that house prices have been increasing for the last three months as of May, 2015, which had an annual growth rate of 5.4%. That percentage was higher than April’s increase of 4.7% and March’s increase of 3.8%. The HPI is issued by the Federal Housing Finance Agency, and another report by The Standard and Poor’s/Case-Shiller also showed a slower growth based on a moving three-month average. This growth in home prices shows a strong demand for new and existing homes from home buyers nationwide.
The National Association of Realtors (NAR) also had good news to report about existing homes under contract nationally. The Pending Home Sales Index (PHSI) reached a record-high in 9 years in May, 2015, and declined only slightly in June. This statistic is based on homes with signed contracts as reported to the NAR. Even with the decline, the PHSI was up 8.2% compared to June, 2014, and the number of homes under contract has been increasing for the last 10 months consecutively. The Southern Region reflected a 5% increase for the entire year of 2015 for contracts on homes for sale.
