by Tim McLaughlin, Sr. Vice President, Weichert Financial Services
One general knock on employment data in the marketplace is that is is a lagging economic indicator. However, that is not the case for the housing market.
Over the past few years, fears about job safety along with severe levels of unemployment weighed down the already reeling housing market. Now, continued jobs growth appears to be putting more wind behind the growing housing recovery.
Bolstering the turn in sentiment toward housing is the renewed fall in mortgage rates thanks to the latest bond buying program unleashed by the Federal Reserve (QE III), driving interest rates down to historically low levels.
Underscoring the improved outlook, Fannie Mae’s September national housing survey out Tuesday showed an 11th consecutive monthly expectation for home price appreciation. At the same time, the percentage of respondents who expect home prices to increase over the coming year rose to 37%, the highest level since June 2010.
Meanwhile, the percentage of respondents saying it is a good time to sell a house rose an additional 9% from the level it was just one year ago. Increased confidence among potential sellers is a good sign because many have held off on listing homes in recent years due to what in many cases were seen as fire sale prices. That adds further anecdotal evidence that the flood of foreclosures hitting the market may be continuing to dissipate.
Although debate continues over the surprise fall in the unemployment rate, it dropped to 7.8% in September from 8.1% the prior month, the housing markets are more concerned about the trend. And for now, that trend is going in the right direction.
To support this consensus, the Federal Reserve, via its Beige Book business survey, said Wednesday that the U.S. economy was expanding “modestly” last month, supported by improvements in housing.
With historically low interest rates and ample housing supply, there is no time like the present to purchase that home of your dreams (or refinance the one you already own). Let your trusted Weichert Realtor and your knowledgeable Weichert Financial Gold Services Manager help you find a home and assist in structuring affordable financing to make your dream a reality today.