By any measure, the housing market is on an upward swing, particularly when it comes to home prices. However, economists say that this aspect of real estate is hot for all the wrong reasons. Reports from the National Association of Realtors indicate that prices are not necessarily treading higher because of a surge in buyers. Instead, the seemingly endless price increases are a direct result of such limited inventory on the market.
Although the housing market can generally be classified as being in a steady recovery from the crash of 2008, home ownership and new construction levels are still at "recession" rates. The homeownership rate, in fact, is at its lowest since the Census Bureau began tracking such data fifty-one years ago.
An estimated one million new households were formed in 2015 but only 620,000 homes were built according to the Urban Institute, a data tracking frim. Based on current trends, experts believe home prices may continue climbing for the foreseeable future.
Meanwhile, mortgage rates are near all-time lows. Conforming no-point 30-year fixed rates averaging 3.375 percent while the 15-year rate is near 2.625 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.