Existing home sales continue to improve in Seattle and across the country.
Despite limited home inventory, the National Association of REALTORS® reports that 4.59 million existing homes were sold in February on a seasonally-adjusted, annualized basis. An “existing home” is a home that is not classified as new construction.
February’s data shows a 9 percent improvement from the same month last year.
There are now just 2.43 million homes for sale nationwide — a 19% reduction versus a year ago. The complete home inventory would “sell out” in 6.4 months at the current sales pace which is a dramatic improvement from previous highs.
Some analysts believe that a 6-month home supply indicates a housing market in balance.
The real estate trade group’s report contained other noteworthy statistics, too :
- 32 percent of home sales were first-time buyers
- 33 percent of home sales bought with cash (i.e. no mortgage)
- 34 percent of home sales were foreclosed homes or homes in short sale
In addition, almost a third of homes under contract “failed” to close last month. These failed contracts could be due to appraisal issues, the buyer’s inability to secure mortgage financing, or home inspection problems.
Even with last month’s high contract failure rate, Existing Home Sales report managed to post the second-highest reading since May 2010. For today’s Seattle home buyers and sellers, the data may be a sign that the housing market is showing signs of bottoming out.
Compared to last fall, home supplies are down and home sales are up which is generally a leading indicator that home prices should start moving higher — if they haven’t already. With that said the days of purchasing a home on speculation and selling the property in a year or two with double digit returns are gone; however, if you are looking long term this market could present a great opportunity to buy a home in Seattle or its surrounding areas.
Homes remain affordable. With 30 year fixed rates on conforming and FHA mortgage loans in the high 3’s low 4’s Interest Rate Quote, home affordability is at its highest in history. Home prices may begin to increase, but if you secure your home with a 30 year fixed rate mortgage you guarantee yourself a fixed low payment even as the cost of living increases.
For more information visit us on our website at www.sammamishmortgage.com or call one of our experienced loan professionals at 425-401-8787.