U.S. Real Estate Bull Market Stays Strong

This article is a very informative article that talks about the real estate market and even with higher mortgage rates the market will stay strong. The article comes from https://seekingalpha.com/ by Clif Droke.

"One of the questions which investors are asking right now is, “Can U.S. real estate prices continue to rise in the face of higher interest rates?” The simple answer to that question is, “Yes!” Not only that, but there is evidence that higher rates are actually stimulating home buying activity, a point we’ll examine in this commentary."

Interest rates are still extremely low and affordable. Down payments are up and so is buying real estate. A lot of buyers are even paying cash. 

"Let’s start with a look at U.S. home price trends. According to CoreLogic, U.S. home prices were up 6.9% on a year-over-year basis as of April. All 50 states showed y/y gains in March, with Washington in first at 12.8%, with Idaho and Nevada not far behind. Moreover, the National Association of Realtors (NAR) reported in May that housing inventory is near all-time lows."

All 50 states showed gains in home prices and that is an excellent report and we still have inventory lows. That will continue for at lease the near future, because of the lack of building homes in the past decade. It will be awhile for the new builds to catch up with the housing market. You are seeing a lot more remodels of existing homes also which is bringing up home prices.

"The median existing single-family home price increased 5.7% from the first quarter of 2017 to $245,500 in the first quarter of 2018, according to NAR. This is up from the annual home price increase of 5.3% in the fourth quarter. What’s more, the increases occurred in nearly every region of the U.S., rising in 91% of measured markets as 162 out of 178 metropolitan statistical areas saw price gains in the first quarter, reports NAR."

That's according to the NAR and that solid numbers. They are not unreasonable numbers and should stay on the upward trend for the near future. Interest rates are really considered low up to about 6%. That is when interest rates my effect home prices. New builds will not effect pricing in the near future because of the lack of inventory and years of no mid priced new builds. 

"Delinquency Rates on single-family residential mortgages remain near a 28-year low as homeowners aren’t struggling to pay their mortgages. The year-over-year change in this important statistic remains under zero, which is technically a bullish sign for the real estate outlook. As long as the following graph remains under the zero level, the trend for delinquencies should be considered benign. It’s also worth mentioning that Foreclosure Activity for U.S. real estate remains in a downward trend, according to data provider Realtytrac.com."

I do not have the graph pictures here, but the key is that responsible people are getting mortgages and a lot of buyers are even paying cash. That is a great foundation for a continuing robust housing market.  

The future looks good for real estate and for buyers and sellers in the market. Need Real Estate? Call me I'm Brett 216-703-5740 EXP Realty Ohio and 602-363-6551 EXP Realty Arizona 

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