The current housing market can be described in one word: optimistic. The outlook for real estate is positive, despite months of hearing about a housing bubble and rising mortgage rates.
Homeowners appear to have little concern about a real estate bubble burst. The majority of respondents to a national survey conducted by ING Direct experienced some increase in their home value over the previous year. The owners in New England and the Pacific states saw the greatest growth, with an average of about 6%. In the south central states, home values were about the same.
Most property holders don't appear to be worried about a decline in the land real estate market. Almost 74% of those surveyed who have owned their homes for more than three years maintained their optimism regarding its value.
The 30-year fixed rate mortgage is at a four-year high. However, even though it hovers around 6%, it is still quite low in comparison to the extremely high rates of the late 1980s, when mortgage rates rose to more than 10%.
Mortgage rates have recently increased because, according to Freddie Mac, there are indications of a strong economy. Existing home sales are also rising in tandem with rising consumer confidence. A strong labor market is to blame for this. The majority of people are aware that consumers spend more when they have good jobs.
Perception is everything for customers. People will continue to buy and sell homes as long as they believe that real estate is a good investment. This is good news for people who are buying or selling homes, real estate agents, mortgage lenders, and just about everyone else in the real estate industry.
