The overall economy has continued to move along a path of somewhat slow growth during the past several months, with jobless claims and unemployment remaining well above the levels present before the impact of the recent recession.
However, a number of reports have found that the housing market, which was one of the major causes behind the economic downturn a few years ago, is showing noticeable signs of life.
A recent MarketPulse report released by the data firm CoreLogic found that analysis seems to suggest that the recovery seen in the housing market this year will be more sustainable than the short-lived market increases seen in the recent past. This enhanced durability of the recovery, according to the report, is due to the fact that home prices are increasing due to a more balanced supply and demand scenario in the housing market, as opposed to the government stimulus which was partly responsible for other gains.
The firm says that even if prices fall more than anticipated during the final few months of this year, prices will likely still finish 2012 ahead of where they were a year earlier.
In addition to positive home price movement, the pace of transactions has also increased compared to the recessionary lows that had a major impact on the housing industry. Estimates from CoreLogic put the sales of newly built homes at a rate 24 percent higher than 2011. In addition, while existing-home sales have not increased with the same veracity, they are still more than 11 percent compared to statistics from the previous year. This higher demand, according to the report, is due primarily to investor demand, as many property firms are looking to purchase rental homes.
Refinancing still a struggle for some
Part of the issue holding back even stronger gains might be that so many consumers are having difficulties when they try to refinance their current home loans to take advantage of the current market conditions.
CoreLogic also noted that it estimates about 1 million potential borrowers have been locked out of the refinancing process despite all of the efforts made by lawmakers, the Federal Reserve and the Federal Housing Administration to make the process more accessible.
Rental prices continue to rise
An increase in rental demand, coupled with the difficulties some households are having when they look to refinance their mortgages, has also created an artificial surge in the demand for rental units. That increases has led to a substantial spike in rental prices, which can be especially troubling to some consumers who were forced out of their previous residences due to foreclosure, a job loss, or other issues.
According to a report from the credit bureau TransUnion, national rental prices increased 1.1 percent in August compared to a year ago, with the average rental price reaching $886. Price increases were even stronger in lower-end rentals, with costs for Level D units spiking more than 7 percent.
Analysts blamed the price spike partially on the time of year, since August is a time when many college students move into off-campus apartments.
Consumers' feeling more confident
Despite the issues present in some sectors of the market, consumers are still feeling relatively optimistic as a whole. A poll conducted by Fannie Mae found that, on average, consumers expected home prices to increase by 1.5 percent during the next year, with 37 percent expecting some level of appreciation.
Those recovering prices may also encourage some consumers to list their properties for sale, increasing the inventory available on the market to meet demand. The survey found 19 percent of people thought it was a good time to sell, which was the highest percentage seen since the survey was first unveiled in mid-2010. In addition, 72 percent of respondents felt that it was a good time to purchase a home.
However, many do not feel that the ideal home purchase window is indefinite, as 33 percent of people felt that mortgage rates would increase during the next year. While that is a decrease compared to the previous month, it still shows that a significant percentage of people feel borrowing costs will increase in the near future.
Those looking to take advantage of low mortgage rates and other favorable housing market conditions should first take the opportunity to review their credit reports for any unfair marks or other discrepancies.
These issues could cause consumers to be given a lower credit score than their payment history and other factors might otherwise justify. Working with a credit repair law firm may help clear up those issues and put consumers back on the right track.