Housing Affordability at Highest Level in Decades
The National Association of REALTORS (NAR) reported in late February that existing housing inventory fell to a two-year low, a sign that excess inventory is being reduced across the country. Existing home sales — including single-family, condos, co-ops and townhomes — were down in January, falling 5.3 percent to an adjusted annual rate of 4.49 million units.
Nationally, qualified buyers are finding favorable mortgage rates hovering in the high 4 to mid 5 percent range for a 30-year fixed-rate loan. These historically low rates have created exceptional buying opportunities. According to Lawrence Yun, NAR chief economist, "The housing market will soon get a lift from very favorable buying conditions – not only from improved affordability, but also from the stimulus of an $8,000 first-time home buyer tax credit, and higher conforming loan limits that will allow more people to tap into 50-year low mortgage rates."
NAR anticipates an additional 900,000 home sales will result from the housing stimulus, and expects housing inventory to fall below an 8-month supply by year end. The reduction in inventory points to strengthening conditions in many markets across the country.
