That eternally optimistic group of individuals, the National Realtors Association (NAR), has announced that the housing market is “clearly on a recovery path,” according to NAR chief economist Lawrence Yun[1]. Yun credits “rising jobs and excellent affordability conditions” with the current slow recovery and projects “moderate improvements into 2012.” He cautions, however, that “not every month will show gain – primarily because some buyers are finding it too difficult to obtain a mortgage.”
In March of this year existing home sales rose (although median prices fell slightly), contributing to an overall recovery trend that has been developing since last July, when the market bottomed out in the wake of the federal housing credit expirations. Yun believes that home sales will come back without additional federal stimulus, but did add that “sales would be notably stronger if mortgage lending would return to the normal, safe standards that were in place a decade ago – before the loose lending practices that created the unprecedented boom and bust cycle”[2].
NAR president Rob Phipps is hoping to encourage homeownership in place of renting using recent numbers as well, pointing out that “rents are projected to rise at faster rates over the next few years” while fixed-rate loans provide homeowners with stability. This same argument is being made by many investors who are snapping up properties with the intention of renting them to long-term tenants and counting on rising rents to make those properties generate increasing amounts of cash. Are you investing in rental properties, or do you plan to do so in the coming year?
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[1] http://nationalmortgageprofessional.com/news24761/latest-nar-report-finds-housing-market-path-recovery
[2] http://www.seattlepi.com/realestate/article/Home-sales-continued-slow-recovery-in-March-1345224.php