The National housing data for February 2013 indicates that the market has tightened for listing inventories. Although the data shows a month to month increase of 1.15% of the number of homes listed, the median days on the market is down to 98 days, a 9.26% decrease month over month. Median list price is up to $189,900 as well. Out of 146 markets tracked the median age trended downward in all but one market so this is a pretty uniform trend. This numbers would indicate that existing home owners that have been on the sidelines waiting for the market to improve are finally beginning to list their homes and the market is absorbing these homes quickly.
Reduced stocks of used homes is good news and a breath of fresh air to New Home Builders who have been hurt by market valuations that are below the cost to produce. However it does make it more difficult for home buyers. In most markets there is not a large stock of standing inventory that is in good shape to purchase. Those looking to leave their apartment and become homeowners need to think and plan far enough in advance to build a home. Given that it takes approximately seven to eight months (assuming there are no financing challenges) for a builder to permit and build a new home. A renter needs to start shopping about two months after signing a new lease. That gives them about sixty days explore financing options, choose their community, make their selections and sign their paperwork.
On the financing side new FHA rules and more restrictive criteria for USDA loans make these financing programs less attractive financially over the long term, but for those buyers where the lowest out of pocket expense is the largest hurdle, they are still the best financing programs available. The recent changes make it so, once again, there is a long term economic advantage to putting 20% down on a conventional mortgage.
For those who dream of owning their own home. These next twelve months should provide a window of opportunity. The prices on homes are just beginning to rise, the interest rate is still low. For those who qualify for a mortgage, with some planning on their part, they can lock in low housing costs with a fixed rate mortgage and ride the market as the value of their home increases and they build equity.