The housing market is super important to look at for multiple reasons. Buying a home, refinancing a home, and general housing market related issues take into account how the housing market looks. It is very important to have a clear understanding of what’s going on so you can make an educated decision. There are some ways that you can tell whether or not the housing market is improving.
You See Improvements in the Job Market
When you see that the job market is improving, you can assume the housing market will follow. When the job market is doing well, people are making more money. When people are making more money, they are in a better position to own a home. You can also check to see if the unemployment rate is dropping as a good indicator of how the job market is doing.
Fewer Homes are For Sale
When there is a lot of supply but not enough demand, sale prices go down. That’s why you want to see that there is not an excessive amount of housing inventory. That means not a lot of people are in the position to buy a home.
The Median Sales Price Stays Put or Increases
When the housing market is improving, you will see median sales prices increasing. If the median sales price declines then you can see that the housing market is depressed. In order to properly compare you will want to look at the median price for prior years. As long as the median sales price improves or doesn’t decrease, that can indicate that the housing market is improving.
Businesses Begin to Reopen
When you see business owners opening up their doors, it can be an indicator that the housing market is getting better. That means they are anticipating enough business to stay afloat. They are likely expecting people to spend money. If people are spending money on non housing needs, they may be able to afford to buy a home and put money into the housing market.
Fewer Foreclosed Signs
When you see a lot of foreclosure or short selling, that indicates that buyers are struggling. When these types of listings aren’t as frequent, that means homeowners are in a better position financially.
More Appealing Interest Rates
Interest rates decrease when there is a lot of financing going on. A lower interest rate can mean great purchasing power for buyers. This can easily help improve the housing market.
The National Association of REALTORS’ Housing Affordability Index
This is a measuring system that looks at the percentage of buyers that are able to buy a home. The bigger the percentage then the lower amount of income is needed in order to be eligible for a mortgage. You can review this information online for free and it can give you a good idea of the state of the housing market.
There are many factors that can impact the housing market. That is why it is important to try and understand them so that you can have a good idea about the current state of the market. Understanding this information can help you make informed decisions, especially in times where the housing market is important to look at like in a mortgage refinance. Take your time and look at the factors! You can also discuss the housing market with a professional like a real estate agent.