Cincinnati Real Estate

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Kathy S. Koops GRI

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Economic Update for Real Estate

filed under: Informational posted on July 28th, 2015

Real Estate Economics

Lawrence Yun PhD. of the National Association of Realtors just released the latest economic update for real estate.

The updates are interesting because it covers not only the real estate market -it also provides details about the overall economy.  Highlights of the report:

Economy

  • Spending for household furnishing and equipment has been solid-growing 6% in this quarter as well as 6% in the preceding quarter.  Increased real estate sales is the big factor for the nice numbers.
  • Residential construction spending increased 6% in the first quarter.  Housing starts are rising.

Housing Market

  • Existing home sales in May hit the highest mark since 2009.
  • Pending contracts to buy existing homes hit a nine-year high.
  • Buyers are coming back in force
  • First time buyers now make up 32% of all buyers versus 27% a year ago.
  • Inventory remains low by historical standards in most markets.
  • Builders will construct more homes and new home sales will follow this trend.
  • Until new construction relieves the housing shortage- the lack of inventory will continue.
  • Housing affordability is falling
  • Mortgage rates at 4.3% to  4.5% by the year-end and easily surpassing 5% by the end of 2016.

What does all this mean to the average buyer and seller in greater Cincinnati?  Prices will continue to rise slowly-but not in every neighborhood.  If and when interest rates go up the housing prices will remain steady of decrease a little in order to open the door to as many buyers as possible.  Finally if you have spoken to a real estate agent about buying or selling make sure to revisit the numbers today or immediately before listing.  Getting all the data at the right time remains crucial in the current real estate market.

 

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