First American Financial Corp. has released the First American’s proprietary Potential Home Sales model for the month of April 2016. This model provides helpful insight for those looking to understand the housing market. It provides a look into whether current home sales are above or below their long-run potential based on present market conditions and expectations.
The Housing Market In April 2016
Over the course of April 2016, the model showed that the market as it relates to existing home sales is performing beneath its potential by 4.1 percent. This is an estimated 232,000 seasonally adjusted and annualized rate (SAAR) of sales. This is actually a notable improvement from March.
A General Trend Of Growth
In April, the market potential for existing home sales went up by 2.2 percent compared to March. This is a marked increased of 122,000 (SAAR) sales. It has also increased by 1.5 percent compared to last year. Currently, the seasonally adjusted and annualized rate of potential existing home sales is 5.36 million. This represents a large 86.5 percent increase from December 2008, when the market reached its potential low point peak. It has yet to fully recover from the 2008 recession. It is still 11.8 percent below pre-recession figures. In July 2005, the market peak potential was reached.
A Volatile Housing Market
The 51. Percent month over month increase and 1.5 percent annual increase in home sales were apparently driven mostly by gains in the Northeast and Midwest regions. The housing market has been incredibly volatile over the course of the past few quarters. This is due to a diverse number of varying economic factors pulling the housing market in scattered directions. While the housing market has moved closer to its potential, factors such as low inventories of homes for sale and tighter credit availability are hampering flourishing market activity, even as labor, wage, and mortgage rate conditions continue to improve.
Get In Touch With Colony Title Today
Founded in 1995, Colony Title Group handles in excess of 2000 real estate closings per year in the central Maryland area. Our experienced staff can handle closing transactions from start to finish, from preparing contracts to putting those on the search for a new home in touch with our large network of Maryland realtors. To learn more about our services, please contact the Maryland real estate insurance experts at Colony Title Associates by calling 410-884-1160 or visiting ColonyTitle.com today!