Higher Home Prices in the Spring
As the spring market gets going, more buyers are finding higher home prices than they may have expected, CNBC reports. “People quite frankly came out and got sticker shock … they picked up the price sheet and saw, ‘Wow, that’s way more than I thought’ because home prices had gone up so much in 2013,” Brad Hunter, chief economist at Metrostudy, told CNBC.
The housing recovery has pushed up home prices nearly everywhere. Over the past year, home prices rose in 225 of the 276 cities tracked by Clear Capital, a provider of real estate data and analysis. Prices nationwide rose by 10.9%, pushing the median price for existing homes up by $30,000, to $215,000. For people who have waited to sell their home or refinance their mortgage, that’s good news
In February home prices were up 9.1% which is more than this time last year according to the National Association of REALTORS®. But incomes are up only 2.1% from a year ago, according to the Bureau of Labor Statistics. Buyers also are facing rising mortgage rates and tighter credit conditions.
Still, while prices have been on the rise, home prices are well off their height from the housing boom in 2006, housing experts note. Inventories remain tight in many markets as some home owners wait for higher home prices before they list.
"I think buyers are extremely fickle, and what's weird about it is the market is in a funk on both sides, it's like trying to get pandas to mate at the zoo," Glenn Kelman, CEO of Redfin, told CNBC. “Sellers feel like, 'I can rent it out. I've got a very low mortgage rate on this place, and when I sell the house I'm also giving up a 30-year mortgage on it at 3.5 percent."
As home prices continue to rise, more owners who had been underwater—meaning that they owed more on their mortgage than what their home was worth, will come out and start buying and selling homes again. CoreLogic reports that almost 3.5 million homeowners were lifted out of negative equity between the end of 2012 and mid 2013.
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