First Quarter Housing Market Trends
The housing market continued to make steady and modest gains in the first quarter of the year. Home prices were broadly rising and thereby helping homeowners accumulate equity. Hard to believe that housing equity from the gloomy years of 2010 to now has essentially doubled from $6 trillion over $12 trillion as the median home price rose from $166,100 to $222,400. Based on the first quarter trends of 6% home price gain, another $1.3 trillion in housing equity could be added to homeowners’ wealth this year. Warren Buffet’s quip about buying when everyone is scared appears apt. The scary period of in-and-around 2010 recorded only 4 million home buyers, but those who took that decision are smiling pretty. Meanwhile, existing-home sales in the first quarter of this year were at 5.3 million annualized pace, which is a 4.7% gain from one year ago. There could be more room to grow given that sales are certainly not the frenzy pace of over 7 million that occurred during the easy subprime lending days and because jobs are consistently being added to the economy provided the mortgage rates remain manageable and do not shoot up.