The existing home sales report released last week confirms that the housing market is showing substantial recovery as home prices continue to rise, while inventory levels continue to decline, according to mortgage industry expert Barry Habib, vice president and chief market strategist at Residential Finance Corporation (RFC). New home sales, as well as the number of building permits, are both up sharply, reflecting positive news in the housing sector and creating an opportunity for homebuyers today. After 15 months of continued rising home sales, the median home price currently sits at $183,000, according to Habib.
Distressed inventory and distressed home sales, are becoming less of a factor,” Habib said, “and that trend is anticipated to continue.”
The increase in the median home price on a year-over-year basis is up 11 percent, which really shows that distressed properties are being removed from the market and are becoming less of a factor. So the overhang, or shadow inventory, does not have as much of an influence on the market. So, home prices do appreciate to some degree, but not by 11 percent," said Habib. "Levels of inventory are declining significantly, it is almost unprecedented to see the levels of decline we are currently. We are seeing 20 percent reduction in inventory on a year-over-year basis. With much less supply, and potentially increasing demand, the only result possible is higher prices. Once again, this is a good time to be a homebuyer; individuals looking to purchase a home today will be handsomely rewarded in the future.”
Housing inventory numbers continue to testify to the health of the market and the opportunities that exist for homebuyers, Habib added.
Habib is vice president and chief market strategist at RFC and is a frequent speaker on financial markets, housing, negotiation, sales training, building relationships, technical trading analysis and staying motivated at industry events and conferences. He appears regularly on Fox Business Network and CNBC Network where his segment, The Monthly Mortgage Report has appeared for over 13 years on Squawk Box.