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Published On: Mon, Jun 22nd, 2015

US Home Sales Highest in Nearly a Decade

Is the US real estate market still in a slump? Recent statistics indicate it may not be. In March, pending home sales were the at the highest level seen since June of 2013, according to the National Association of Realtors.

This was the third straight month that these numbers were on the rise. In April, pending home sales increased again, and this pushed the statistics to the highest point the market has seen since May of 2006.

More Buyers Entering Market

photo courtesy Charlotte Real Estate

photo courtesy Charlotte Real Estate

In the spring season, more buyers than usual entered the market. Demand was growing across the country, with metro areas seeing the highest levels. Confidence is returning, as people are starting to see home buying as a solid long-term investment strategy. Interestingly, the largest increases have been seen in the Northeast, Midwest and South, with little growth at all in the West.

Strong Hiring Leading to Real Estate Upswing

Real estate and job markets are closely tied, and years of strong hiring are likely the cause of this increase in home buying. Companies have hired 3.1 million new people over the past year, and these new jobs mean more free income to use to buy homes. People who have solid jobs and job prospects are more likely to purchase a home and settle down. This is part of the reason that the strongest gains are being seen in metro areas, because this is where companies are hiring.

Drawbacks to Strong Demand

This strong demand is not without its drawbacks. As more people enter the buying market, inventory is having a hard time keeping up. This is good news for sellers, but it could lead to an increase in prices that does not quite meet the demand, which could stall the growth. Also, while companies are hiring, wages are not increasing in proportion to the increase in home prices.

Buyers Encouraged to Move Quickly

Prices are on the rise, inventory is shrinking and interest rates are still low, but expected to increase. Buyers who are in a financial position to purchase should make the move soon, because waiting even one year could lead to over $18,000 in increased costs due to higher prices and interest rates. The market is still good for buyers, but if trends continue the market may shift to one that is more costly for buyers.

Guest Author: Lolita Di

 

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