According to CoreLogic, after hitting the sharp decline in 2012, the US housing market is dramatically heating up again this year. In the last two months, the current home buyers are fortified by the finances, leaving first-time buyers in a frustrating mood.
The September 2016, home prices have raised by 6.3 percent, bigger than August, indicating increase each month.
Frank Nothaft, CoreLogic chief economists said, “Because of huge home price recovery , the home-equity wealth reached an amount of $13 trillion, twice during the last 5 years. The average gain of per homeowner is recorded by $11,000.”
The geographic variation of home price recovery is wide. However, Alaska and Connecticut are the two states where a price decline is noticed. Other states like Oklahoma, New Jersey, Maine, Arkansas, North Dakota, Maryland, and Wyoming are barely in darkness. Whereas, tech company nearby states Oregon and Washington are enjoying double-digit gains, with Utah and Colorado close to them.
Actual wealth of homeowner’s differs from what they declare on paper. Thousands of borrowers were attracted towards the low mortgage rates because of their low monthly income and mortgage payments which prompted them to refinance HELOC. Whereas, a number of people have extracted cash in these home equity lines of credit.
“The home equity withdrawal is a sign of homeowner’s weakness to reflect tight credit policies. Although the lending conditions have been reduced when compared to last 15 quarters,” wrote by a well-renowned property economist Matthew Pointon.
So homeowner’s equity rises double and new homeowner’s are facing higher prices attacks along with the shortage of homes for sale. It shows a clear demand, but not enough supply.
Pointon further added,“This way we got the evidence that new buyers are making a comeback return to the housing market.”
The National Association of Realtors recorded, a long jump in new homeowner’s in September 2016 sales, however, other measures reported that a drop from 40 percent to 34.8 is noted for the month of May and September 2016, according to Inside Mortgage Finance. New buyers are returning, but at a slow pace and that was the lowest percentage recorded since 2014.
Their slow return is likely due to the high housing market. First-time buyers invest very cautiously than others and they are also very sensitive in their credit ratings.
According to John Burns, top-notch real estate consultant, “The Housing affordability of top 20 housing market is now below average also includes Texas, Houston, Tennessee, Austin, and Denver.”
“This means that these metropolitan markets are at high-risk of the next recession,” the researchers added.