Deb Tebbs Group

Cascade Sotheby's International Realty

Home Builders See Market Improving in 2012

Thanks to a variety of factors, homebuilders in the US are reporting the most-improved spring selling season in seven years. Mortgage rates are hitting record lows, job markets are improving, and shrinking inventories are attracting more potential buyers to consider home ownership. It all adds up to an increase in buyer confidence and the potential end to a multi-year slump in the national real estate market.

According to the Commerce Department, purchases of new homes went up 3.3 percent in April from the previous month. The biggest homebuilders in America reported an average 25 percent increase in purchase contracts in the first quarter of 2012, which is the largest jump since 2005.

Mortgage rates are dropping to all-time lows, spurring home sales. According to Freddie Mac, mortgage rates for 30-year loans fell to 3.78 percent, which is the lowest in Freddie Mac records since 1971. The Federal Reserve has also vowed to hold interest rates near zero through the end of 2014, and has also bought home loan bonds to lower borrowing costs.

Housing starts in the first quarter jumped 20 percent from a year ago, according to a Houston-based firm that monitors new construction in 84 metropolitan areas.  In Phoenix, new housing starts jumped 58 percent, and they jumped 30 percent in Northern California.  Inventory of finished new homes is down 13.4 percent from the previous year.

One of the big positive signs is the increase in demand for new homes.  While demand for existing homes has been rising for months, this has been largely driven by investors and distressed property sales. An increase in demand for new homes is a sign that traditional homebuyers are getting more involved again. Homebuyers are now choosing to pay a premium for a new home over a foreclosed one because foreclosed properties often come with a lot of hidden costs in the form of maintenance.

About 5,000 potential buyers showed up for the opening of nine model homes last weekend at The Bridges, a community in Delray Beach, Fla. The company used golf carts to shuttle customers from their cars and sold 18 homes over the weekend and another handful during the week. The company, which sells homes in the community for about $500,000 to $1.5 million, has raised prices about 5 percent since preconstruction sales began in February.

Rising rent across the country is driving more and more Americans with good credit to consider home ownership.  Rent has increased nearly 1 percent since the previous quarter, which is the largest jump since the recession began.  The economic pressures of renting are making home ownership a much more viable alternative for many people.

The Central Oregon market has certainly seen an increase in new home construction, and with loans as low as they are now is the time to consider home ownership for yourself. To see the best that the region has to offer, get in touch with the Deb Tebbs Group and let us show you what makes Central Oregon so special.

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