Several recent trends in the industry point to more buyers entering the market. The first of these is historically low interest rates. Over the past few weeks, we have seen mortgage rates drop to the lowest average in more than three years due to uncertainty in the markets after the Brexit decision in Europe.
The impact on housing affordability when rates are this low is measurable, especially when coupled with a strong June jobs report. According to the Bureau of Labor Statistics, the U.S. created 287,000 jobs in June – well above expectations – and the national unemployment rate remains under 5 percent.
Taken together, consumers have far greater buying power today. In fact, the chief economist of Realtor.com says that well-qualified buyers can now afford a home that’s 8 percent more expensive than they could at the beginning of the year, and that this is more than enough to offset the rise in prices during that time.
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