And that’s exactly what happened recently when the latest market activity report was released by the National Association of Realtors in July.
Evidently, contracts to purchase previously-owned properties increased more than expected during the month of July, signaling that there truly is renewed momentum on the national housing market.
Let’s Take a Closer Look at The Numbers
According to a report from the National Association of Realtors, the pending home sales index increased 3.3 percent after a 1.3 percent decrease during the month of June.
That increase is much higher than previously expected. In fact, the median projection according to a Bloomberg survey of economists called for the index to increase about 0.5 percent. Specifically, estimates from 37 economists ranged from a decrease of 0.5 percent to an increase of 3 percent.
So why did the number of home sales do significantly better than previously predicted?
Experts credit the increase to a lot of factors, including:
- Increased hiring
- Rising property values
- Historically low interest rates
Not only are these factors increasing home sales but they’re also encouraging builders to break more ground.
Other factors encouraging a more robust housing market include a gross domestic product that grew at a 4.2 percent pace during the second quarter as well as the fact that unemployment claims decreased to 298,000 last week.
Experts add that faster wage growth as well as easier access to credit would also help boost the local economy
More Housing Market Data That Will Help Provide Context
Still, not all of the news from the national housing market has been completely positive.
Here are some other highlights of the National Association of Realtors’ latest report:
- Purchase contracts decreased 2.7 percent in the 12 months ending in July, which followed a 4.7 percent year-over-year decline in June.
- July marked the 10th month of year-over-year declines
- The pending sales index was 105.9 on a seasonally-adjusted basis.
- Pending sales increased in three of four regions. Specifically, sales were up 6.2 percent in the Northeast, 4.2 percent in the South and 4 percent in the West. Purchase contracts decreased 0.4 percent in the Midwest.
- Resales increased to a 5.15 million pace, which is the best they’ve been since September.
- Construction also rebounded, with starts climbing 15.7 percent to a 1.09 million annualized rate
- Meanwhile, contracts on new homes dropped unexpectedly during the month of July to a 412,000 annualized pace, which is the weakest it’s been since March.
- The average rate for a 30-year, fixed mortgage was 4.10 percent in late August, down from 4.53 percent at the start of the year
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