According to The Commerce Department, sales of new homes have risen dramatically in recent months. With a September increase of 5.7 percent and a total increase of over 27 percent in the last year, the news couldn’t be more encouraging. According to this data, the rate of new home sales has now reached its highest level since April of 2010, when the homebuyer’s tax credit went into effect.
While these numbers are still below what many in the market would hope for, they are indeed a sign that the market is trending in the right direction. Rising home prices signify that the housing market is recovering from the economic crisis, and this news is encouraging builders to start breaking ground once again on new properties. Due to a decrease in building during the height of the economic crisis, the availability of new homes is still somewhat low, increasing prices to meet a rising demand.
It is worth noting that new homes are not the only area of the real estate market that is bouncing back. The same data from The Commerce Department also shows that sales of previously occupied homes are on the rise. All of this is incredibly good news for the real estate industry, and will prove to be a boon to buyers and sellers alike. A healthy market is good for competition, and more demand and sales serve to improve the market for mortgages, as they help make lenders less leery of being saddled with homes in a market that simply won’t allow them to move.
While it will still take some time for the real estate market to reach the level of health it had attained before the economic crisis, investors, homeowners, and prospective buyers are all breathing a sigh of relief with the release of this new data. Economic recovery is a slow process, but it is good to see that the progress is making its way into the real estate market. With this great news coming out, we can likely expect to see a number of new homes and condos on the market within the next 1-2 years.