Current Housing Turning Into Seller's Market

Total existing home sales (including single-family, condos and co-ops)  in the month of December increased by 12.8% at 4.94 million this year compared to last year's 4.38 million-unit level.  See data below:

         Source: National Association of Realtors

According to NAR chief economist, Lawrence Yun said, "Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales." he said.  "The number of potential buyers who stayed on the sidelines accumulated during the recession, but they started entering the market early last year as their financial ability and confidence steadily grew, along with home prices.  Likely job creation and household formation will continue to fuel that growth. Both sales and prices will again be higher in 2013."

The total housing inventory at the end of December fell 8.5% to 1.82 million existing homes available for sale.  Although the limited inventory, overall sales are still expected to increase.  The biggest effect of limited inventory is that the home prices tend to increase.  However, considering all the factors, home ownership is still affordable.

The inventory is expected to have a seasonal rise in spring.  But clearly, a seller's market may be developing.

MORTGAGE RATES

Although the current mortgage interest rates are at historically low with rates slightly above 3.5% for 30-year fixed rate.  It is expected to increase as the year progresses but it should remain under 4%.

For Alaska current mortgage interest rates, refer to http://www.ahfc.us/buy/resources/current-rates/.

The housing is showing plenty signs to recovery - from increase in existing home home sales to decrease in mortgage interest rates.  According to Jed Kolko, Trulia chief economist, housing market will return to "normal" in 2-3 years time as long as the market shows the same improvement.  For questions on housing, please don't hesitate to contact me or you can visit my website - http://www.jamesteamrealestate.com.