Another monthly jobs report was released today by ADP and the news is less impressive than most economists and analysts were predicting/hoping for. The report essentially says that the economy added only 38,000 jobs last month, including small losses in manufacturing. While it is encouraging that the economy continues to add jobs, most economists agree that at least 150,000 jobs must be created monthly...just to keep pace with population growth!
But what does this mean for housing? A report released yesterday by Case-Schiller, a firm that tracks housing prices across the United States, was also unimpressive: most major metropolitan areas continue to see falling home prices. In the Twin Cities metropolitan area, home prices are down roughly 10% compared to a year ago. Now a (pretty strong) case can be made that the housing tax credits last year artificially inflated prices, and they are now "re-setting". The report also indicates that housing prices are now similar to 2002 levels. In other words, nearly 10 years worth of equity has been lost by homeowners.
This string of lackluster economic data has had effects on mortgage rates as well. Rates have gone down over the past week and it's unclear how soon they will rise, if at all.
At the risk of sounding like a broken record, the bottom line is that there has never been a more opportune time to buy. With prices continuing to fall (albeit slowly), rates as low as they have ever been, and an above-average amount of inventory on the market, buyers are in a great position to snatch up deals that, just five years ago, would have seemed laughable. If you are thinking that a transition from renting to owning makes sense (in this market, it does!), please call or e-mail me - I would be happy to assist you in any way possible.
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