Housing Market Index Shows Continued Strength
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.
In September 2014, the Housing Market Index increased to 59 as compared to 55 in August 2014. The strong September figure builds on the momentum in the Housing Market Index as reflected in the positive index reports for July and August. The meaningful increase in the index on a month-over-month basis was driven by new home sales, increased traffic from prospective buyers of new homes and a modest gain in the future home sales component of the index. (Source: Bloomberg)
What it Means for Mortgage Borrowers
The increase in the index suggests building demand for new homes, especially in the South, Midwest and Western regions where new home sales represent a credible alternative to existing home sales for prospective buyers. Additionally, analyst commentary of the September Housing Market Index figure points to increasing interest from first-time home buyers who have been slow to enter the housing market due to economic and employment uncertainty as well as stricter borrower qualification guidelines. As more first-time home buyers move from the sidelines to the home buying marketplace, FREEandCLEAR provides great resources including our First-Time Home Buyer Mortgage Cheat Sheet and First-Time Home Buyer Basics Mortgage Guide to help them navigate the process and select the mortgage that is right for them.
The FREEandCLEAR Mortgage Expert
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