For the past few years, many folks have delayed purchases of their next home because they’ve had a tough time selling their current one. But those days may be nearing an end.
The National Association of Realtors has reported that inventory — the number of homes for sale across the U.S. — has declined to a 6.6-month supply. That’s down from 9.1 months in April 2011.
We’ve seen a similar reduction in my neck of the woods. Here in Cumberland County, Tennessee, inventory stands at 5.93 months, and in my smaller resort community, it’s 5.4 months.
Nationwide, existing-home sales in April rose to 4.62 million from 4.48 million in March. And new-home sales increased to 343,000 from 328,000 in the same time period.
Part of the reason for the improvement is that the economy is steadily getting better, relieving a lot of stress from would-be buyers. Unemployment claims continue to decline from their peak of 659,000 in March 2009 to 370,000 last week. And interest rates continue to drop as well, allowing buyers to purchase homes at very low rates. Freddie Mac announced this morning that 30-year mortgage rates have declined to 3.78%, their lowest levels since the 1950s!
The result of all these statistics is that we are entering a unique time period in real estate: a cycle when buyers can purchase homes at reasonable prices and low rates and sellers have a larger pool of buyers willing and able to buy homes now — not two years into the future.
If you look at Case-Shiller’s Composite 20 Home Price Index, you can see that housing prices appear to be bottoming out. Calculated on a scale using 100 as the base, prices in the top 20 metro areas, as of February 2012 (the latest data), were 136.71. That compares to a level of 201.05 in May 2007.
And in an April survey, the National Association of Realtors noted that multiple offers homes for are beginning to pop up across the country. That means the window is beginning to close on bargain-basement-priced homes.
So if you’ve been sitting on the fence as a buyer or a seller, now may be the time to climb down and grab your opportunities during this rare cycle that can benefit both buyers and sellers.
Rates are low, and credit is becoming easier. For the latest on mortgage rates, you can go to Mortgage Rates Credit Cards Refinance Home CD Rates by Bankrate.com, fill in the particulars, and see how much your potential mortgage payment would be.
And if you’re just beginning your search for a new home, Find Real Estate, Homes for Sale & Houses for Rent on REALTOR.com can save you gasoline and time. More than 91% of buyers begin their search on the Internet, according to the National Association of Realtors. It’s an easy way to winnow down your search and save you some legwork.