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The housing<\/a> market has been off to a roar this spring. In fact, the market is performing so strongly that the National Association of REALTORS\u00ae has upgraded its forecast for the year.<\/p>\n Read more<\/strong>: March\/April 2017 Market Pulse<\/span><\/p>\n<\/blockquote>\n At the start of the year, home sales were expected to match last year\u2019s pace due to higher mortgage<\/a> rates and diminishing affordability. But the market is hardly slowing down, notes Lawrence Yun, NAR\u2019s chief economist. He now predicts existing-home sales to rise by 3.5 percent, and home prices likely will increase 5 percent this year.<\/p>\n Home sales are strong: Real estate<\/a> professionals report an increase in foot traffic at listings<\/a> and mortgage applications to buy a home remain above year-ago levels. Also, signed contracts to purchase a home are essentially running at decade highs, Yun notes.<\/p>\n \u201cNot only are the buyers out in the market, but they are committing quickly,\u201d Yun notes in a recent column for The Hill. \u201cThe typical days on the market for a newly listed<\/a> property is short at only a month. A month\u2019s supply of inventory is less than four months, which is well below the six to seven months that is considered more balanced.\u201d<\/p>\n Escalation clauses in contracts are reportedly growing. This is where a potential buyer bids on a home at one price but is willing to raise the bid if the seller receives any higher bid.<\/p>\n But the hot market shouldn\u2019t offer<\/a> up any fears of a housing bubble, Yun notes. Unlike years past, buyers are coming in with higher down payments and higher credit scores. Also, the lack of new-home construction is another reason not to fear a bubble, he says. Prices don\u2019t drop when there are inadequate supplies, and homebuilding is basically at half the level it was in the mid 2000s.<\/p>\n The strengthening housing market is becoming one major contributor to economic growth too, Yun notes. Higher home prices and housing equity will help give a boost to consumer spending, he adds.<\/p>\n \u201cWith no imminent threat of a recession, the housing market\u2019s strong first quarter sets the foundation for continued gains the rest of the year,\u201d Yun writes.<\/p>\n Source: \u201cFirst Quarter GDP May Be Cool, But Housing Market Downright Balmy,\u201d The Hill (May 1, 2017)<\/em><\/p>\n<\/div>\n [ad_2]\n
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