The housing market is strengthening even with difficult mortgage-qualifying conditions. Just as easily it was to get a mortgage prior to the real estate collapse, it is as difficult to get a mortgage today. Lenders are being more cautious. Some buyers are being involuntarily sidelined and are frustrated with mortgage availability. The National Association of Realtors is claiming that if most of the financially qualified buyers could obtain financing, home sales would be about 10 to 15 percent stronger, and the related economic activity would create several hundred thousand jobs over the period of a year. So, yes it seems that the housing market is going to pull the economy up by its bootstraps.
I predict that with the more balanced market conditions and great motgage rates, prices will start to rise. Locally, we should see a 5 percent increase by next spring and another 3 percent by the summer. But this will still be 8 percent below the lofty prices of ‘06 and ‘07. But sellers will need to be careful and not get ahead of themselves as interest rates will rise and that will affect the purchasing power of the buyers. As for transaction numbers, we will set records. So as Twain, the humorist, would say,”Get the facts first, then you can sort them as you please.”
Bill Barrows is a Newburyport real estate agent.