Sunday, January 25, 2015

New home sales up in December



The U.S. housing market closed out 2014 on a high note with increased sales of both new and existing homes, as 5.04 million homes sold to new owners. The 2013 spike in home values finally slowed down enough last year to keep prices in affordable range for buyers with relatively stagnant incomes.

In addition, global economic pressures have encouraged more purchases of bonds and treasuries, which keeps mortgage rates lower and buying homes cheaper. While the U.S. stock market has floundered in early 2015, investing in bonds is considered a "safer haven" to place funds.

One of the biggest problems for the housing market remains weak participation from first-time home buyers. This demographic represented only 29 percent of the market in December 2014, significantly lower than the 40 percent ratio deemed healthy for growth.

Millennials have moved to urban centers in droves to start their careers, also burdened with massive student loan debt and not enough assets for down payments. As long as this trend continues, interest rates could stay near historic lows, making refinancing more attractive and home buying more affordable.

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