The National Association of Realtors Chief Economist and Senior Vice President of Research, Lawrence Yun, spoke to the St. Louis Association of Realtors this month. Here are some highlights from his presentation.
The St. Louis residential retail market has rebounded. People are no longer asking “Have we hit bottom yet.” The data shows that we hit bottom between 2010 and 2011. The number of sales and housing prices have increased year over year for the last two years.
Nationally the median home price has increased almost 20% over the last two years. Homeowners who couldn’t consider putting their home on market two years ago because they were under water may now be in the black. Which is great because the Exiting Home Inventory is down near a 13 year low.
Lack of inventory will drive housing prices higher and the inevitable rise in mortgage rates will hurt the affordability of homes. Meaning a person considering buying a home NOW will be able to get more for less now. While a person who waits a year, will not only have to confront higher sale prices, but will also be paying higher interest rates.
Two take aways from Forecast #3:
If you were ever considering buying rental property as an investor, now is the time to do it. Home purchases will become more expensive keeping solid renters from becoming solid home owners. These will be ideal tenants.
If you are considering purchasing a home, now is the time to talk to a lender and Realtor about your options. Prices are rebounding and interest rates are increasing. A $1300 monthly mortgage payment today means you can afford a home with a list price of $272,300 with a mortgage interest rate of 4% versus a list price of $228,900 with a mortgage interest rate of 5.5%.