Hi All,
US housing market still hot
May 25 06:17
AFPThe sizzling US housing market showed no signs of cooling in April as new data on Tuesday showed a 4.5 per cent monthly jump in existing home sales to an all-time record.
The US National Association of Realtors reported that home sales rose to a record seasonally adjusted annualised pace of 7.18 million.
The figure was higher than the 6.9 million expected on Wall Street and suggested that the US housing market remains red hot despite concerns about a bubble.
“A new record is a bit unexpected, but so is the performance of mortgage interest rates which have been lower than forecast,” said David Lereah, NAR’s chief economist.
“When we look at recent job gains, we see all the positive factors coming together to coincide with a powerful demographic demand for housing.”
The inventory of unsold US homes rose five per cent to 2.48 million, representing a 4.2 month supply.
The median sales price rose 15.1 per cent on a year-over-year basis to $US206,000 ($271,600), the fastest year-over-year price gain in 25 years.
Traditional 30 year mortgage rates have fallen to 5.71 per cent in the latest week from 5.83 per cent in April and 5.93 per cent in March, which are among the lowest in decades.
Interest rates have fallen further this week, with the 10 year US Treasury note used as a benchmark for mortgages dipping to 4.04 per cent.
New records highs in this particular national market. Seems to be at odds with the current world trends.
Cheers
A different take from news.com.au:
US House Bubble Set to Burst“I have to tell you that some of these stories we’re hearing about residential speculation make me uncomfortable … real estate is ultimately driven by fundamental factors such as general economic growth, demographics, and household income.”Swonk said some of the factors contributing the strong housing sector are low interest rates, income growth and demographic trends.
“It’s not defying odds when mortgage rates are falling and incomes are improving,” she said. “You can have (national) balance and regional imbalances.”
Swonk said the experience in Japan — where property prices have fallen for the past 14 years — highlight the risks and show that a correction can be long and painful.
But the analysts added, “When it comes, it could be a doozie. Some simple calculations suggest a hit worth about three per cent of GDP (gross domestic product).”Cheers, F.[cowboy2]
The US is a very big market and trends are very different in different areas. Upstate New York, where a lot of people on this forum are currently looking, has had very little growth over a long period of time. Other markets have been booming.
Hi Foundation,
Both articles sound all to familiar. Just as the end comes some herald doom and others continued fortunes for everyone.
I have never been to the US and don’t suggest we lump all markets together and make blanket assumptions. I dont own any property there. I am sure there are areas with plenty of capital growth left. There will undoubtedly be areas that are well worth a chance.
Mostly, I find it extremely interesting how different information is reported and how differently it is interpreted.
Cheers
I
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