Monday, June 07, 2010

MOST OPTIMISTIC HOMEOWNERS STILL BUYING INTO THE AMERICAN DREAM

Most American homeowners are eternal optimists. They are always looking forward just beyond the cloudy horizon and hoping their humble abode will appraise for more money than it is worth today.

Thanks to the federal tax credit, an abundance of FHA-insured loan closings and other help from Uncle Sam, it appears that the nation has weathered the housing downturn and now is beginning a long recovery.

Existing-home sales data indicates that the tax credit brought tens of thousands of buyers into the marketplace, reduced inventories, and helped stabilize home prices around the country, according to the National Association of Realtors (NAR).

“We needed the tax credit to help normalize the market,” said Vicki L. Cox Golder, 2010 NAR president. “Now it’s time for the market to stand on its own legs.”

There are strong indications that new-home construction also is coming back, economists say. U.S. housing starts increased for the second straight month in April to the highest level since October of 2008. Most of the revival came in the single-family home sector, where starts jumped 10.2 percent from the previous month to a seasonally-adjusted rate of 593,000 units.

Meanwhile, home-loan interest rates are near rock bottom. In late May, Freddie Mac reported that benchmark 30-year fixed mortgages dipped to an average of 4.78 percent, the lowest the average has been since early December when it hit 4.71 percent.

NAR believes now is the time for Realtors who specialize in residential sales to educate clients and help them “find a home they can afford in a neighborhood they love,” Golder said.

Realtors also are lobbying hard in Washington D.C. to unfreeze the home-finance pipeline to ensure a steady flow of capital for mortgages, Golder said.

“It is still smart to buy a house or condominium—not only because of attractive interest rates and homeowner tax deductions, but because home is where we make memories, build our future and feel secure,” Golder noted.

“After all, we’re still a nation of home owners,” Golder said. “Despite all the troubles we’ve been through as a nation, the homeownership rate in the first quarter of 2010 stood at 67.1 percent, according to the U.S. Census Bureau.”

There’s no doubt that most Americans still believe in the dream of homeownership. That’s why every spring they mow the lawn and plant shrubs and flowers, and stain the deck. They water the lawn and tend those plants all summer long, then rake leaves and clean the gutters in autumn. And when winter comes they fill the backyard bird feeder and shovel snow off the driveway.

It’s all about keeping the place up, enjoying those summer barbeques, birthday events, Little League championships, holiday parties and the laughter of children.

And hopefully, when the time comes, you’ll find that happy buyer who is willing to pay more for your house than you did.