As half of 2015 is over, it appears the residential real estate market is set to experience its best numbers since 2006, the peak year of the housing bubble. The growing job market is the driving force behind the high demand for homes. Over the last year, millions of jobs have been created, especially within the segment of people most likely to purchase a first home.
Realtor.com is enjoying record Internet traffic as well. A majority of users report the intentions of purchasing homes. As demand rises, homes are selling quickly. In May 2015, the median age of inventory was 66 days. The most popular markets are seeing inventory move even faster. This low age of inventory is a sign that demand is exceeding supply. As a result, price appreciation is above normal.
Although a continuing high appreciation may be a problem, experts believe it will die off soon. Median list prices are a good indication of the direction of actual price changes. Over the last two months, these numbers have moderated. At the same time, there is a record amount of households renting. This has limited the number of vacant apartments, so rents are rising. In many areas, it costs less to buy a home than rent.
Even though mortgage rates are rising, demand is not slowing down. Buyers understand home ownership is becoming affordable, and people are gaining confidence in the market. With continued growth, combined 2015 home sales may approach 6 million, a number close to the country’s peak levels.
