Housing is constantly in the news, and more often than not, different media outlets provide conflicting outcomes about the current state of the market and where it is headed. So what data is noise and what is actually worth paying attention to? As John S. Tobey from Forbes states, your best bet is to examine the pieces of the economy that directly affect homebuyers and their ability and willingness to purchase a home. These are indicators like mortgage rates, housing price trends, income growth and the homeownership rate. The delinquency rate is also important because when the rate is low lenders view the chance of borrowers defaulting as low and therefore are typically more willing to lend.
What’s not a good indicator is existing home sales data, which is reported monthly. Existing home sales figures represent more of a transfer of ownership among existing homeowners than actual new buyers entering the market. The accuracy of the data is also questionable because it tracks home settlements as opposed to contracts, meaning the actual sale typically occurred sometime in the past 30-90 days.
For more on what to watch and where our housing market is today we recommend you read Tobey’s full article on Forbes: https://www.forbes.com/sites/johntobey/2019/05/23/housing-market-health-look-at-these-five-indicators-not-existing-home-sales/#781dbb505613
We hope you find this information helpful. Sincerely,
The Convergence Team