Good news in employment has kicked the real estate market into high gear this summer. The numbers say it's a great time to sell a home and demand is high. In the latest figures available, June sales of existing homes climbed 5.1 percent, the third month in a row that sales exceeded 5 million homes.
Home sellers are finding that prices are up nearly 8 percent in the last 12 months. In many markets this is because there just enough homes on the market to meet demand. So prices are being nudged up. Rising prices brings some cheer to the market because it means that fewer people owe more on their homes than the home value. In fact, the number of people upside down in their mortgages has dropped 19 percent in the last year. For some homeowners, this could mean it's time to go back in the market and sell. Meanwhile for buyers, mortgages are still very low. Most 30-year fixed rate loans have been just above 4 percent this summer. But that was a slight increase from the dramatic lows of 3.59 percent -- those rates have been offered for more than four years.
Confidence and low interest rates put buyers in the market for their first homes. About 32 percent of homes sold in May were to first-time buyers. That is up from 27 percent a year ago, according to economists.
Low supply: Act fast.. With supply of homes for sale down, buyers have to focus on their goal, making sure to get pre-approved for a loan, and be prepared to make a deal. As interest rates make a slow climb up, people looking for a house to become their home should move quickly. Even a 1 percent rise in the interest rate could slash buying power. Interest rates moving up 1 percent means that a buyer once approved for $500,000 might only be able to spend $460,000. So if your heart is in a home, acting quickly is crucial.
Mortgages are available
New data by lenders shows that some consumers overestimate what they need to qualify for a home loan. Two-thirds think they need a credit score over 780, which is considered excellent, but a credit score of 660 or above is considered good. Some 36 percent think they need 20 percent down, but this is usually not the case.