The middle of the real estate market seems to have made a recovery without anyone noticing. The most recent data from the National Association of Realtors shows good news for home owners with homes valued between $100,000 and $500,000.
This segment of the market includes nearly 68 percent of homes for sale and has seen a price recovery of about 16 percent over the past three months and nearly 19 percent in the last year.
Homes priced under $100,000 have dropped more than 6 percent in the last year, on average, and homes priced above $500,000 are showing slower gains of less than 15 percent in the past year.
The type of rapid rebound seen in average priced homes is similar to what would be expected in the stock market.
Stock market crashes always seem to be followed by quick bounces. It’s the behavior after the bounce that lets investors determine the direction of the trend. After the bounce, the decline continues in a bear market but prices continue moving higher in a bull market and often reach new highs.
Separate reports on housing note that foreclosure activity continues to decline and home affordability continues to rise because mortgage rates are so low.
These factors point towards a continued and sustainable recovery in the home market.
Almost all available housing data confirms that prices have reached a bottom, at least on the national level. Recovery will likely bring more home sellers into the market and the increased supply of homes for sale should slow the pace of price gains.
Three months ago, no one expected home prices to move sharply higher. A bottom seemed to form while pessimism grew. Home owners should be pleased with the state of the real estate market and potential buyers should consider acting now instead of continuing to wait.
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