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Skyrocketing Real Estate Sales Hit an Historical Benchmark
Real Estate Prices Are the Highest They Have Ever Been and Home Sales
Stand Just One Notch Below April's High Point
By the Mortgage Guy / MortgageLoanRequest.com
Day after day, the chatter that is heard
is all about the rising cost of homes, record low interest
rates, refinancing through hybrid amortization plans and home sales
remaining unabated. Despite all the talk and speculation of a bubble that's
going to burst, April of this year was the highest month on record for
sales of existing homes. May is virtually in the same category. While
the median cost of homes continues to rise, and the demand for housing
does nothing to stifle these price increases, the most basic rules of
supply and demand have gripped the nation.
mortgage plans, little or no money down, and lenders jumping over
each other to qualify and approve loans for prospective home buyers has
brought us to the point where the total sales of previously owned homes
and condos stood at 7.13 million for the month of May. This figure is
not much off from April's 7.18 million homes, which was the all time record.
Not to be out classed, the price of homes continues to rise with the new
median cost for a home coming in at $207,000.
All of this continues to stimulate conversation and speculation about
the housing bubble, that many say exists and others relegate to a "frothing".
Even after Federal Reserve Board Chairman, Alan Greenspan, talked of "froth"
in the market and the "conundrum" of interest rates, investors
still fight over the few available properties left on the market. Financial
experts worry about homeowners who have strayed into deeper waters with
their unconventional loans and over extended budgets. The housing sector
is what is keeping the U.S. and world economies afloat. Currently, there
is widespread chatter of a domino effect in the near future if too many
people lose their footing, including the well known Fannie Mae and Freddi
Mac, the two secondary loan giants.
The Federal Reserve has worked hard at trying to get the short-term interest
rates to climb and thus quell inflation to a degree, but this effort has
seen little or no result. Mortgage rates keep going lower and lower, breaking
every record that anyone could have sighted from the past. All of this
has been occurring as the property industry continues to shatter previous
sales and price levels day after day, for every imaginable type of home
on the market.
Not all regions have seen these historic highs, but none are truly suffering
or in desperate need of sales either. While the Northeast remains stagnant,
the Western region of America has seen an increase of 1.9 %, the Midwest
a drop of 3.0 % and the South a nominal drop of .07 percent.
While Greenspan waxes on about a stable economy with a "reasonably
firm footing" and inflation seemingly under control, experts are
predicting that the Fed will continue raising interest rates until at
least summer's end. The only thing that could really throw this all into
a tailspin would be a sudden upward fluctuation in the price of oil, which
we are already beginning to see signs of due to speculation of increased
demand, and a shortage availability. However, none of this is stopping
people form buying homes and property at an increasing rate.