The housing market is strengthening, despite economic challenges of job and wage growth and a recent rise in mortgage rates, according to several recent housing reports.
Some analysts foresee the pace of the recovery slowing in the coming months, but they don’t expect the recovery to come to a halt.
“We still have a lot of young people that are going to start moving out and forming households, and we’re going to have to find housing for them,” said Patrick Newport, the chief United States economist for IHS Global Insight. “There are shortages of homes just about everywhere.”
Home prices are inching higher, giving more equity to households. That not only aids the real estate industry but also makes homeowners feel wealthier and more likely to spend, analysts note. In the second quarter, 2.5 million households regained equity in their homes, according to CoreLogic data.
CNBC reported: “Analysts offered a cornucopia of reasons for the continuing strength of the housing market: people rushing to buy before prices and interest rates increased further, a gradual relaxation of lending standards, an uptick in inventory, a smaller share of foreclosures in the sales stream, and large-scale buying by investors looking to put houses on the rental market.”