There is good news on the housing market. More “For Sale” signs are getting that magical “SOLD” sign running across the sales placard on the front lawn. According to a report from the Commerce Department in August 2012, U.S. new home sales rose 3.6 percent in July. That number matches May's two-year high of 372,000 new-home sales. That annual rate, seasonally adjusted, reflects the highest sales since April 2010.
The downward turn of new home sales several years ago is due to a number of things. Massive layoffs and company closures caused people to concentrate on current financial responsibilities rather than incurring an additional one in the way of a new home. Because of limited funds, credit records were damaged. That prevented qualification for home loans. Banks were subject to scrutiny on loans given during the last decade. The result is more stringent requirements for mortgages. It is harder to qualify for a loan and the required down payment has increased.
Builders walked away from planned and partially completed housing developments when the sales stopped. As a result, the number of new homes for sale is significantly less than usual. The number of new homes for sale in July was only 142,000. Nearly half a century has passed since 1963, the last year records reflect that low of a number.
Home prices escalated rapidly up until 2006. The bubble burst in 2006 and sales stagnated. Lower prices have provided affordable pricing, as homes are nearly a third of previous prices. Mortgage interest is less than 4 percent and the economy is rebounding.
Further good news is that previously-owned homes are part of the increased home sales market. That is true for Tampa Bay real estate as well as other parts of the nation. According to the National Association of Realtors, sales of previously occupied homes in July surpassed the number for June. With a ten percent raise in sold homes during the past year, the number of homes that were available in July could be exhausted in about four and a half months.
Builders that left projects standing due to lack of funds and buyers are gaining confidence. Potential buyers are once more looking at homes and property. Building permit applications are the highest they have been in almost four years, as new homes are built.
The National Association of Home Builders (NAHB) estimates 3 jobs are created for a year for each home that is built. Tax revenue is also significant, as it totals approximately $90,000. As projects are undertaken and developed, others appear to help with the recovery. Home prices increased slightly over two percent for a one-month period in May. April and May increases lead to a perception that the housing market is on its way to recovery.
A healthy housing market requires 5.5 million previously occupied homes and 700,000 new homes sold each year. An anticipated 8 percent growth in annual sales of previously owned homes sold will result in 4.6 million sold for 2012. New homes will also fall short of their goal. However, the trend towards recovery is steadily moving forward with these positive signs that national home sales are increasing.
If you are considering the purchase of Tampa, Fl. real estate or have questions, please visit www.tampa2enjoy.com.