The nay sayer’s, otherwise known as those who know nothing and love to predict doom on the premise that all good things must come to an end, predicted 2005 was the end of the housing boom in the US. They would have been wrong. However, the red-hot market keeps getting hotter.
And it’s not just in Florida and Connecticut. The government reported Tuesday that purchases of new single-family homes shot up 12.2 percent in March, the biggest percentage gain in more than a decade. The big gain pushed sales to an annual rate of 1.43 million units, the highest in history and well past the 1.3 million rate set last October.
The March surge surprised analysts. They had been forecasting sales would decline around 2 percent last month, reflecting the rise in mortgage rates during the month. The 30-year mortgage rose at the end of March to 6.04 percent, the high so far this year.
But now rates have turned back down again, a development that many economists believe will support further gains in home sales in coming months.
A nationwide survey done by Freddie Mac showed rates on 30-year, fixed-rate mortgages have fallen for three straight weeks to 5.8 percent last week, very close to their low for the year of 5.57 percent in early February
What analyst do not take into account is that fact that rising incremental interest rates are not worrying the American public. There are those that owned homes or remember their parents owning back in the late 70′s when there were double digit interest rates that fluctuated like a Geiger counter measuring a California earthquake. Also the fact that more people have access to mortgages and home ownership than ever before. Blacks and Hispanics are at unprecedented home ownership.
I think what many analysts miss is the following:
Home ownership is not only looked upon as a great asset and form of investment. Home ownership is still one of the great American Dreams.