Is the housing market showing improvements and on the road to recovery? A recent survey by the National Association of Realtors shows that home sales did rise in September which can be taken as at least a positive sign. While it may be true a housing recovery is taking place it will be more than likely be volatile. Yet the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates.
Interest rates are at historical lows which is helping the market. Interest rates are nearly just half what they were a decade ago. Another factor is homes have become more affordable. Nationally home prices are running about 22 percent less than five years ago. This makes housing affordable and many areas see monthly mortgage payments lower than rent.
It is worth noting lower home prices are linked with the current foreclosure crisis. The uncertainty over foreclosed homes could further lower home prices and delay the recovery of the housing market. Distressed homes still accounted for 35 percent of sales in September compared to just 29 percent a year ago. Over 1.7 million homeowners have lost their homes since January 2009. In the face of this national crisis consumer confidence understandably remains tepid. Despite the recent uptick in sales consumers continue to be quite concerned about the short term outlook.
For those thinking a little long term who are looking to buy a home where they plan to live and raise their families now may be one of the most opportune times in history given low rates and the depressed housing market.