8 Jul

There has been a lot of gloomy news about the nation’s housing market in recent months, and even farther back. But there is good news:

First, many people in their 20’s and 30’s are now finding that properties in some areas have come down in value to the point where they can buy their first home. Housing prices, especially on the lower end, may soon begin to rise quickly, argue some economists, and that the correction in house prices and the low level of home building is really the cure for the housing industry’s problems. Overall, around the nation, the amount that buyers spend on housing as a percentage of their income has declined – good news for many. In fact, 2011 is expected to achieve the highest affordability condition in 40 years, especially compared to renting, which is becoming more expensive.

The number of new houses being built has fallen, actually helping to stabilize prices since supply and demand need to come into balance. That’s where the poor housing starts data can be helpful. While it’s true that homebuilders are suffering, the last thing the housing market needs right now is an explosion of new home construction. The slower the pace of new home building, the faster the imbalance between supply and demand should be corrected.

Lastly, interest rates continue to hover around historical lows. Check with your agent for an up-to-date quote, since rates change every day, but borrowers with good credit can obtain a 30-yr fixed rate mortgage in the low-to-mid 4% range. This is great rate, and lower than five or ten years ago.

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