If you are a home builder then this news will definitely excite you. The housing industry have just recently made its come back and is still a surprise to many. Housing did not take off well the past months with several feet of deep snow on the ground. Recently though housing sales for existing and new construction jumped up by 7.8 percent. This was an ultimate seven year high.
Demand is very strong in the market. Buyers are indeed willing to trek the knee deep snow in order to attend open houses meeting and make a purchase. With the increase in demand for houses and with supply not moving in number, the inventory of homes is tightening. This situation if not mended will force home prices to shoot up rapidly and home builders will take advantage in the profit taking as well. Analysts have given their reports that with how the current sales are rising, the supply of homes in the market accounts for a supply of less than five months.
On the other hand, foreclosed and inventories for short sale offered at discounted prices have been tremendously reduced. This phenomenon will take away the toll of the downward pressure on the prices of homes.
Another factor considered by experts in their premeditated guess of a continuous rise in housing sales is the situation of young adults. These young adults are preparing a life on their own outside mom and dad’s home.
The household formation rate has improved since last year. In a survey conducted, the results showed that those living with relatives and close friends are now buying or looking for a place of their own to stay within the year. Of those surveyed, 55 percent plan to get their own house to stay.
According to a data gathered by Thomson Reuters, mortgage lenders are also at an advantage with the current situation. Within the first quarter this year, around 70 percent of mortgage lenders are expecting a stronger demand for loan in the next three months. This calculation is up by around 20 percent when compared to the last two quarters last year.