Massachusetts Home Values Increasing Despite Sluggish Global Economy
According to a recent reports from the National Association of Realtors we’re continuing to see an increase in home values fueled by a continued strong market demand and a tight supply of inventory.
This solid demand drove sales growth early this year and spurred additional construction, home starts have been up across the board throughout much of the year.
The Standard & Poor’s/Case-Shiller 20-city home price index climbed over 5 percent in the past year. Many economists view this turn in the market as more sustainable than the sharp double-digit gains at the start of 2014.
Three years of solid hiring and low mortgage rates have bolstered the real estate market throughout much of the state, although further gains will likely require even better employment numbers.
“Prices are rising the fastest in markets where job growth and net migration are the strongest and inventories are the tightest,” said Mark Vitner, an economist at Wells Fargo Securities in a recent interview.
Throughout much of the United States and in Massachusetts specifically the housing sector has expanded for much of 2015. Sales of existing homes jumped 4.7 percent in September to a seasonally adjusted annual rate of 5.55 million, the National Association of Realtors reported last week.
Housing starts rose in September and is up 12 percent so far this year compared with 2014, although much of this new construction came in the form of condominiums in more metropolitan areas. While single family home construction did not decrease, it has been flat the past several months.
In general, we’ve been seeing an overall increase in single family home values over the past year due to tight inventory across many markets. The number of existing homes for sale has fallen 3.1 percent in the past 12 months. In September, the number of available homes was equal to just 4.8 months’ of sales, below the six months’ supply that is typical of a balanced market.
Additionally, low mortgage rates have helping prospective buyers. The average rate on a 30-year fixed mortgage fell to 3.79 percent last week which is the 13th straight week rates have averaged below 4 percent.