The US Housing Market Showing Positive Improvement But Challenges Remain

The recovery of the US housing market after the huge downturn of 2007 and 2008 continues at a steady rate. The rate of recovery is slower than what many experts predicted and there are still difficulties to be overcome. Still, the value of the positive trend should not be underestimated. The challenges must be identified and dealt with.

The main positive trend is the small, but significant increase in home sales. 387,500 homes were sold in April 2014. This marks a significant increase from the March sales which were 382,500. The sales are still below the levels of last spring, however.

The home prices in the US increase at a moderate pace. The home price index rose from 165.4 to 166.8 from February to March 2014. It was 148.4 in March 2013. The rising prices are a sure sign of recovery, but the negative aspect of the increase has to be considered as well. In many metropolitan areas the homes are too expensive for first-time home buyers to avoid given their current income. This is the case despite the fairly low mortgage rates. The home prices increase at a greater rate than household income and this is one of the major issues in the housing market at present.

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The inventory is marking a decrease. It went down from 5.6-month supply in March 2014 to 5.3-month supply in April 2014. This is a considerable drop from the November 2013 when inventory went up to 5.9-month supply, but on an annual basis there is a small increase. The small inventory is one of the major factors for the climbing prices. There are forecasts that it will remain low due to the fact that many existing homeowners managed to secure mortgage refinance at extremely affordable rates and will want to keep them instead of going for a bigger home.

More institutional support will be necessary for the housing market to recover completely from the recent crisis.

Christian

Christian

Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info
Christian

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