Housing Market Index Increases
At FREEandCLEAR, we are focused on keeping you up to date on the latest developments in the mortgage market and explaining how those developments impact mortgage consumers. Because the housing market and the mortgage market go hand-in-hand, that means that we also keep tabs on housing market news and trends. Although many factors contribute to the strength of the mortgage market including interest rates, refinancings and general economic conditions, a strong housing market usually has a positive impact on the mortgage market.
The National Association of Home Builders Housing Market Index is one of the key housing market statistics that we track at FREEandCLEAR. The Housing Market Index incorporates factors such as current and expected new home sales and interest level from potential new home buyers. It is important to highlight that the index focuses on new home sales, so homes built by builders that have never been lived in before, as opposed to existing home sales, which represents a larger portion of the overall housing market. This means that the Housing Market Index only captures one piece of the overall housing market, but it is a very important piece. The index is typically reported on a monthly basis, with an increase in the index reflecting an improvement in the new home sales market and a decrease in the index reflecting a decline in the new home sales market. In August 2014, the Housing Market Index increased to 55 as compared to 53 in July 2014. The August figure came in at the high end of expectations reflecting increasing demand for new homes. (Source: Bloomberg)
What it Means for Mortgage Borrowers
The continued strengthening of the new home sales market should have a positive impact on the mortgage market although it is important to point out that some new home builders offer their own financing for buyers or special programs that require lower down payments. If you are in the market for a new home be sure to compare any mortgage offered by the builder to programs offered by other lenders in your area. Always remember that you have lender options when getting a mortgage and creating lender competition can save you a lot of money over the life of your mortgage. Check out the COMPARE LENDERS feature on FREEandCLEAR to review interest rates for lenders where you live.
The FREEandCLEAR Mortgage Expert
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