Appealing Housing Market Brings An Increase Of Buyers

The National Association of Home Builders reports that record low mortgage rates, an impressive selection of homes and affordable prices are opening the door of home ownership for millions of Americans. The NAHB says that as many as 55 million families – or half of all U.S. households --  can afford today’s $200,000 median-priced new home, according to figures released by the National Association of Home Builders (NAHB).

Based on data from the U.S. Census Bureau comparing home prices, mortgage rates and minimum income needed to purchase a median-priced home in February 2007 and February 2009, a typical family today can purchase a house with $20,000 less in household income and save nearly $500 per month on their principal, interest, taxes and insurance. The number of households that can afford to purchase a home today is 55.4 million, compared with 38.4 million two years ago, according to figures compiled by NAHB.

Now that the typically busy and important spring home buying season is upon us, builders are seeing increased traffic and sales in their communities.

NAHB reported that single-family permits were up 11 percent in February, new and existing home sales also posted gains and the huge inventory backlog is being slowly whittled down. In a survey for Century 21 Real Estate last month among prospective first-time home buyers who indicated they were likely to purchase a home in the next two years, a majority – 78 percent – said that now is a good time to buy a home. Of those responding to the online poll, 68 percent said that now is a better time to buy than six months ago.
 
Another sign that consumers are considering jumping back into the housing market is the growing interest in the $8,000 first-time home buyer tax credit included in the recently enacted economic stimulus package. During February and March, 1.5 million visitors logged on to NAHB’s consumer Web site, www.federalhousingtaxcredit.com, to learn more about the tax credit. Further, a new survey commissioned by Move, Inc. found that nearly 20 percent of those who plan to purchase a home this year are doing so to take advantage of the tax credit, which expires at the end of November.
 
Housing and the US Economy

Housing is a critical component of the U.S. economy, accounting for about 15 cents of every dollar spent in this country, so any upturn in the housing market should be viewed as good news for the overall economy.
 
Construction of an additional 500,000 single-family homes – the difference between today’s anemic construction rate and one that would move closer to meeting the underlying demand for housing – would generate 734,000 jobs and $35 billion in wages in the construction industry  and another 790,000 jobs and $37.7 billion wages in manufacturing, trade, and service sector jobs, he noted.
 
Additionally, another half-million housing starts would bolster the tax base for government, generating $45 billion in federal, state and local tax revenues. And the benefits go well beyond the completion of each home. Within the first year after buying a home, those half million households will spend about $2.5 billion more on appliances, furnishings and property alterations.

Source: the National Association of Home Builders

Confused by the current housing market? Don't know if you should buy or rent? We can help, just ask.  

International Market