Reports the Associated Press: "Home sales are on pace for their best year since 2007. First-time buyers are streaming back into the market."
Why all the activity now after so many years of sluggishness?
AP zeroes in on three factors it says are driving recent housing activity.
- Employers are hiring again and Americans are feeling more secure about their finances and their futures.
- Mortgage rates are rising, though they're still very affordable. But knowing the Federal Reserve is moving toward an interest rate hike has left many house hunters feeling antsy.
- House prices are rising, too, Buyers want something they can afford, and that has spurred a lot of them into action.
- Homeowners are beginning to get back some of the equity they lost during the financial crisis. The number of underwater borrowers is shrinking dramatically.
The AP story ends with this warning, however. "Many economists caution that the sales gains of recent months could be short-lived if prices increase so sharply buyers are priced out of the market. The recent rise in mortgage rates could also curtail sales, similar to the higher mortgage rates slashing into sales in the middle of 2013."
The AP story has a lot of interesting information. You can find the full article on the ABC News website. Freddie Mac's economists look at the issue from a slightly different perspective in our June U.S. Economic and Housing Outlook but come to a similar finding: more Americans may be ready to start taking on more mortgage debt.
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