Is Housing Rebounding?
THERE’S A HOUSING RECOVERY GOING ON WHETHER YOU KNOW IT OR NOT
According to Jim Doti, president emeritus and professor of economics at Chapman University, there is a housing recovering at the local, state and national level.
Published in the Orange County Register Opinion section on July 10, 2019, Jim Doti says, "Similarly, a housing recovery is now underway in Orange County. Although it may be hard to see, the fundamental economic factors bringing it about are certainly in place.
Chief among them is the sharp drop in mortgage rates. Since peaking at a rate of 4.9 percent last November, it dropped sharply to 3.8 percent in June.
The implications of this dramatic drop in the mortgage rates translates to real savings for homebuyers. Purchasing a median-priced home in Orange County at a 4.9 percent rate in November resulted in monthly P & I payments of about $3,400.
By June, with the mortgage rate at 3.8 percent, those P & I payments dropped to $3,000. That’s a monthly savings of $400. Even more important, the minimum qualifying annual income for approval of that mortgage decreased from $164,000 to $142,000.
Another factor undergirding a housing recovery is a strong wealth effect.
Fueled largely by hefty stock market gains since December, the net worth of families has increased sharply. Although data on wealth are not available at the local level, the 14 percent annualized increase in net worth in the country likely mirrors Orange County. With fundamentals like these, why all the gloom and doom about the housing sector?" Please read the full article on the Orange County Register
In Conclusion John Doti says, "As long as mortgage rates remain at or below 4 percent, I am confident that the housing recovery will continue and grow in strength during the second half of the year.
By then, year-over-year increases in home sales will finally turn attitudes from pessimism to optimism. But I’m already there." Doti, James.
“Know It or Not, There’s a Housing Recovery Going On.” Orange County Register, 10 July 2019, p. A014.