US House Prices Are Building Up, Say Realtors

US House Prices Are Building Up, Say RealtorsReal estate sales and prices in the US are on the up but tight credit and limited inventory are holding back demand, says the National Association of Realtors (NAR).

Their index reveals that most regions in America have seen strong price gains compared to a year ago and sales have increased by 0.6% to nearly five million properties being sold in March.

The NAR’s chief economist Lawrence Yun says the US real estate market is recovering strongly.

He added: “The housing market recovery is robust despite access to credit being tight and limited inventory.

“Without these restrictions, home sales could easily be above the five million unit rate.”

Interest from potential buyers has leapt by 31% over the year but the sales of property are only about 10% higher.

Home prices on the up

The NAR is calling for more new homes to be built as a way to control prices from growing out of control.

Home sales in the US are now at their highest rate since November 2009 when the market peaked with 5.44 million sales and there has now been 14 consecutive months of year-on-year increases being recorded.

The number of foreclosed or distressed sales accounted for 18% of April’s sales, a fall from 21% in March and 28% in the same month last year.

The NRA report also highlights the increasing number of buyers returning to the market with the average time for a home to be on the market before selling, falling from 62 days in March to 46 days in April.

That’s a much quicker sale period than was being recorded in April last year when properties were taking 83 days on average to sell.

More cash buyers

The number of cash buyers is also slowly increasing, making up 32% of real estate transactions in April, a slight increase of 30% in March.

Tighter lending criteria is still seeing the numbers of first time buyers fluctuating with 29% of them accounting for purchases in April, compared with 30% in March.

To underline the market recovery, single family homes now cost an average of £128,000 – an impressive increase of 11% in the past year.

However, condo sales dropped by 3.3% between April and March but are nearly 16% higher than they were a year ago.  Their average price is now £125,500 – an 11.3% increase over the year.

There is still a mixed picture when the regions of the US are examined for home sales with numbers increasing in the north east, the south and west though numbers fell by 3.4% in the Midwest.

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