Coming Home to the U.S. Housing Market
The U.S. housing market showed signs of weakening in 2014 as home prices increased significantly in many parts of the country.
First-time homebuyers took a more cautious stance, and high-end homes made up most of the residential property sales. However, things appeared to be changing at the beginning of this year, but it is uncertain how long the positive situation will last.
With that in mind, here is a look at the current state of the U.S. housing market as the first quarter of 2015 winds down.
Mortgage Applications See Uptick
According to the Mortgage Bankers Association, mortgage applications increased by about 49 percent in a single week in the beginning of January, 2015.
The main reason for the increase was a drop in mortgage interest rates, which fell to their lowest level since May, 2013.
Other factors that prompted more homebuyers to obtain mortgages included improvement in the job market, increase in credit availability and announcement of a decrease in Federal Housing Administration mortgage insurance rates. Purchase application volume rose by nearly 24 percent, which was the highest since September, 2013.
A decline in foreclosures nationwide is another sign of potential housing recovery.
Data released by RealtyTrac revealed that a total of 643,193 homes in the U.S. entered the foreclosure process in 2014, a 70-percent drop from the 2.14 million homes recorded in 2009.
The number of homes that were repossessed by banks dropped 29 percent last year, reaching the lowest level since 2006. Foreclosure is still a concern in several states, but it is no longer a nationwide problem.
Who Benefits from the Current Housing Market Situation?
Many residential construction companies are doing well because of a rise in demand for new homes.
According to the Commerce Department, the number of residential construction permits that were granted to builders increased by 4.8 percent in October, 2014, which was a six-year high.
Additionally, starts of single-family homes grew 4.2 percent to an annualized rate of 696,000 in the same month, the highest level since November, 2013.
Besides construction companies, people who are looking for construction jobs are also benefiting from the current housing market situation.
In an article published on the National Association of Home Builders website, it is said that residential construction jobs increased slightly to pass the 300,000 mark in June last year.
Those who are learning how to become a home inspector should have little or no trouble finding a good job in the near future as demand for construction and building inspectors is expected to increase by about 12 percent from 2012 to 2022, according to the Bureau of Labor Statistics.
What to Expect for the Remaining Nine Months
As more Millenials reach their early twenties in 2015, it is expected that household formation will increase significantly, which will in turn lead to a rise in demand for new homes. There may also be more existing homes available for sale as more homeowners emerge from underwater.
Additionally, economists are predicting that increases in home prices will decelerate and mortgage rates will increase this year.
Despite a robust economy, strong job growth, positive consumer confidence and low interest rates, there are signs indicating that the U.S. housing market recovery may be faltering.
Lastly, it is expected to experience some softness in 2015.
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About the Author: John McMalcolm is a freelance writer who writes on a wide range of subjects, from construction to finance.