Economic Growth Triggering Housing Demand

With spring homebuying around the corner, we would like to take a look back on last spring's market. In spring of 2016, we were treated to mortgage rates below 4%, even dropping as far as 3.4% in the summer. However, this year started out with mortgage rates already at 4.25%.

Despite this statistic, January existing home sales numbers saw a dramatic increase, setting the fastest pace in nearly a decade. So what does this mean? Well, it could be a trigger moment in the housing market. This is all in the face of low inventory and median home prices increasing for 59 straight months.

A cause for these conflicting statistics can be an increase in household income. Changes in economic conditions and consumer access to mortgage financing are also important influences on homeownership. Overall, one's decision and ability to buy a home is closely tied to all of these economic factors. Recently improving economic conditions have helped fuel a resurgence in the homeownership rate.

While it's difficult to predict future economic conditions, a growing economy and rising income levels play a role in increasing homeownership. Higher household incomes and continued good news on the economy are also increasing demand to buy a home as we enter the spring home buying season. This may be the trigger moment that pushes the housing market to a whole new level.