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Market Value Monday

This week’s focus is the market status from the month of July, new home sales surged while old homes plunged. 

This past July, the real estate market has seen the highest figures in nine years. With a strengthened economy due to a healthy job market and low home rates, new homes went quickly this past summer. There was a 40% increase in number of new homes sold in the northeast over the summer with 12.4% being in new home sales. This is crucial for the economy since older homes were troubled by low inventories and high prices. Inventories were a whopping 6% below what they were in July 2015. The median home price rose 5.3% since July 2015, showing the effect that the economy had on the real estate market.

The median price of new homes decreased 0.5% since July 2015 which may not seem like a lot, but it makes a large difference when other components like loans are less expensive at the same time. It can be assumed that the staggering increase in sales from June to July may be contributed to the amount of new homes that appeared on the market. The summer is the hottest market space of the year and the good weather allows many new homes to be built. Contractors this year particularly were smart about building and selling homes at the right time, while the market was in their favor.

What is most disappointing about the decline in existing home sales was the fact that they were on a steady increase for the first half of the 2016 year. Inventory and affordability are driving prices into the ground for these homes, dragging their portion of the market down with them. Luckily, the end of this year should still mark the strongest year since the recession of 2008. It is just a shame that the market is not reaching its full potential due to these summer setbacks. Officials at Freddie Mac have also reported that their commitment rates of 30 year mortgages have decreased substantially and now are the lowest since January 2013. First time buyers represented 30% of all buyers in 2015 and look to be on the same track this year. New homeowners usually look for new houses, contributing to the market shift this summer.

Here at BridgeView our agents are up to speed with both local and nationwide trends- talk to an agent today to figure out your logistics!

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