kent,wa real estate hope for wa housing market

How Does the Real Estate Market Look Overall?

According to Keller Williams Research, affordability, low rates, desire to buy provide hope for the U.S. housing market.

AFFORDABILITY

Housing affordability now stands at its best level since 1971. This greater affordability helped boost home sales in February. Especially strong was the activity attributed to first-time home buyers, who represented half of new home purchasers this month. The $8,000 tax credit helped move many of these first-time buyers out of their rentals and into their own homes.

In light of weakening global economic indicators and a poorly functional financial system, the U.S. government and Federal Reserve remain proactive, with the Federal Reserve alone purchasing and holding up to an additional $750 billion of agency mortgage-backed securities and $100 billion more in housing agency debt. The Fed moves are designed to provide greater support to mortgage lending and housing markets.

LOW RATES

While economists expect continued softness in the overall housing market, encouraging buyer signs abound given the historically low mortgage rates and the availability of distressed properties. There are localized opportunities for savvy investors and for those buyers who are qualified, willing, and ready to buy on the cheap.

And with rates at historic lows, the question for many borrowers becomes, how long will the good times last? The Fed's actions and mounting federal deficits could weaken the dollar and spur the aforementioned inflationary trend, which could send interest rates back up. In addition, the first-time home buyer tax credit expires at the end of November. Prominent economists maintain that low rates should be available for "at least the next several months." But if fears of inflation cause investors to shun Treasurys, the Fed's impact on long-term interest rates could be short-lived.