Is the Housing Market Heating Up?

After the historic collapse of a few years ago, the housing market has been on a slow rebound marked by increases in new home starts and demand for a limited supply of available houses. Now, a new survey reported in Business Insider offers evidence that the US housing market isn’t just working its way back from the brink in fits and starts, it’s rushing forward at a speed not seen in years. And that rush is being fueled by a sense of urgency on the part of potential homebuyers intent on taking advantage of current conditions in the market.

According to Business Insider, the financial services company Credit Suisse recently conducted its monthly survey of real estate agents and housing industry experts

in 40 US housing markets in an attempt to profile the actual state of the recovery. Their results? Housing is at its strongest in the history of the survey.

Granted, Credit Suisse’s survey only dates back to 2005. But it spans the period of the housing bubble and its disastrous collapse as well as events since then, so behind the hyperbole stand some real data that could shed light on the state of the market as spring selling season approaches.

What’s driving the upswing in market strength? One key factor appears to be a sense of urgency on the part of potential home purchasers. These buyers fear that time is running out on those historically low mortgage rates, and waiting to buy may lock them into higher rates. Home prices are rising, too, and this along with low rates fuels a rush to get a good deal before it’s too late.

Another factor driving buyer urgency is the well-publicized low supply of available houses for purchase. That supply continues to shrink nationwide, for numerous reasons including the holdup of many potentially available properties in the foreclosure pipeline. What’s more, the length of time required to sell a home also fell to a new low in major markets around the country, signaling even higher prices in the coming months as demand outstrips supply.

These indicators of a housing market that’s not just recovering but surging come at a time when tighter mortgage lending standards threatened to exclude numerous potential buyers from getting a loan, and financial experts predicted am upsurge in the rental markets. But as numerous consumer surveys continue to affirm, the “American Dream” of homeownership is still alive and kicking for many, and potential buyers feel the need to act now in the face of future uncertainties in the market.

For income property investors following Jason Hartman’s wealth-building recommendations, Credit Suisse’s findings paint an optimistic picture of the housing market for the months to come. But with inventories low, prices rising and competition keen for existing properties, perhaps that “urgency” to buy isn’t such a bad thing to have.

The American Monetary Association Team

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