US housing market is healing
Now is the time to invest in US property, with the market showing signs of making a full recovery. Frank Nothaft, Freddie Mac vice-president and chief economist, explained real estate has defied the expectations of analysts and is fighting back in several key areas.
"The last few months have brought a spate of favourable news on the US housing market with construction up, more home sales, and home-value growth turning positive," he said. "This has been a big change from a year ago, when some analysts worried that the looming 'shadow inventory' would keep the housing sector mired in an economic depression. Instead, the housing market is healing, is contributing positively to GDP and is returning to its traditional role of supporting the economic recovery."
The Freddie Mac US Economic and Housing Market Outlook for December showed positive signs going into 2013, indicating that investors looking to take advantage of the low prices created by the financial crisis should strike quickly.
While long-term mortgage rates are expected to remain near their record lows for the first half of next year, this will rise gradually during the final six months of 2013. Although this will still remain below four per cent, strengthening property values bode well for the sector. It is expected that across the year, the house price index will rise between two and three per cent.
Freddie Mac claims that household formation will also increase, registering between a net 1.20 to 1.25 million household rise, with housing start-ups around a 1 million annualised pace by Q4 2013. Apartment and single-family for-sale market vacancies will bring down vacancy rates to 2002-2003 levels, as household formation outpaces new construction.
The Global Property Guide had also noted an upturn in the US housing market, reporting in November that house prices were begin to rise, demand was increasing and construction activity was "picking up". Reporting on Federal Housing Finance Agency figures, the newsportal revealed that the seasonally adjusted purchase-only house price index had risen by 4.75 per cent during the year to August 2012.
- Growth continues for US house prices
- Inventory levels in US real estate market 'falling'
- 'Demand is strong' in US housing markets
- US house sales fall as prices climb
- US housing market 'strengthening'
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