The news keeps getting better on the housing front, and that should have a big impact on consumer choices in the short term and in the next couple of years. The economic collapse of 2008 has seen the U.S. economy slowly rebounding to per-recession levels, but the housing market has been stubbornly sluggish. Of course this affects the job market, particularly in construction, and also consumer choices. Many more people are renting these days, even with historically low mortgage rates and depressed home prices.
Now we may be seeing a real rebound, and smart consumers will react to these developments. For example, new home sales jumped in September to a 2.5 year high.
Home builders received more good news Wednesday morning as sales of new single-family homes in September surged to their highest level in 2 1/2 years, the Census Bureau said.
New home sales grew 5.7 percent to a seasonally adjusted annual rate of 389,000 last month. The growth was a significant rebound after new home sales fell off in August to a revised rate of 368,000. That followed a two-year high of 374,000 in July — more indications that the new home market is recovering in fits and starts.
Sales were up 27.1 percent from September 2011.
The median sales price of a new home sold in September was $242,000, down from $256,900 in August. There were 145,000 new homes for sale at the end of September, up from 141,000 in August.
Many prospective home buyers have stayed away from the market as they didn’t want to buy before it hit bottom. We’ll, the bottom seems to have arrived in many parts of the country, so it may be a great time to go home shopping while interest rates remain this low. As we see more activity and increased home values, we’ll also continue to see more home refinancings as another way to take advantage of the low rates. With that we’ll probably see many home improvements as well, from new kitchens for the wife to new man caves for the guys, along with larger maintenance projects like garage doors, roofs and back patios.
The decision to rent or buy is a difficult one for many people, regardless of whether they’re married or single, and sometimes people get too worried about price. The lifestyle issues frankly are more important. But in terms of timing it’s always best to buy when a market is coming out of a bottom, so it’s a great time to start paying more attention.