The leaves are turning and the Boston area real estate market is following suit. As we enter the fall real estate market we can expect continued growth, largely in the amount of inventory in the marketplace and overall number of sales. We saw July pending home sales exceeded the expectations of many industry economists, according to recent reports from The Wall Street Journal. Actual pending home sales rose by 1.3%. Economists in the industry predicted a rise of 0.7%, which is still significant, but not nearly as impressive as the reality of the situation.
NAR Chief Economist Lawrence Yun believes that the increase in July is due to a surge specifically in the West which was a 7.3% increase. Following the West there was a 0.8% increase in both the Northeast and the South. He added that tight inventory levels continue which can limit overall growth in the market which has been one of the chief challenges for the residential market.
“More home shoppers having success is good news for the housing market heading into the fall, but buyers still have few choices and little time before deciding to make an offer on a home available for sale,” he said in a release. “There’s little doubt there’d be more sales activity right now if there were more affordable listings on the market.”
The recent pending home sales data completes reports which were all mostly positive. Builder confidence has risen by 2 points, housing starts increased by 2.1% and new home sales significantly rose by 12.4% due to developers attempting to fill the inventory gap.
The economy remains stable with mortgage rates hovering at all time lows and continued job creation enticing more buyers to enter the market. On the mortgage front, the average 30 year fixed rate mortgage has remained below 3.5% for nine weeks in a row according to Freddie Mac.
Meanwhile, United States employers have been generating more jobs at a faster pace in recent months. In August the Labor Department reported that nonfarm payrolls increased for an adjusted 225,000 in July.
With all of these points considered as we enter fall, we can forecast that another season of positive activity in the real estate market is to be had.