May home prices up 12.2%
Home prices have risen in 48 states 12.2% over a year ago, but fell in Delaware and Alabama. Nevada showed the most gains of 26%, followed by California at 20.2%, Arizona at 16.9% and Hawaii at 16.1%. Just from April to May, home prices rose 2.6% which was the fifteenth straight monthly increase in home prices.
What’s behind this? Businesses are hiring and mortgage rates are still at historic lows. Even with rate increases the mortgage rates have never been lower. The average rate on a 30 year fixed mortgage is around 4.5% which is the highest in the last 2 years. Mortgage rates are tied to the bond buying by the Federal Reserve. Ben Bernanke recently said that that the Federal Reserve could cut back on bond buying later this year with an end date sometime next year if the economy continues to get stronger. There’s a lot greater demand and like we see in the Naples market, there’s a limited amount of inventory and there are even more limited numbers of foreclosures. It’s still not at the crazy height of late 2005 early 2006 and is slowly increasing.
Banks are willing to lend to qualified buyers and have started more creative lending programs including bringing back 5% and 10% down for single family homes that are owner occupied. Since the May home prices are up 12.2%, now is an excellent time to get off the sidelines and get into the housing market. If you’re looking for a home in Southwest Florida, we’re the Realtors to help you get that done. We bring years of market knowledge and experience to the table to help you achieve your housing goals. Whether residential or commercial, give us a call at 239.293.0246 and we will be there for you. We always answer our phones.
