While the Rockford-area housing market ended its year-to-year monthly sales increases at 12 months running, the first full year of monthly increases since statistics have been recorded, the average price rose to a 16-month high.
Rockford Area Realtors (RAR) sold 347 homes in June, up from 340 homes in May, but down 8.2 percent from 378 homes sold in June 2011. The longest previous sales streak ran for eight months ending in October 2001 (the longest since stats have been collected dating back to 1998).
The three-month rolling average price hit $110,049, up 4 percent from $105,766 a year ago June and up 4.9 percent from $104,888 in May. This was the highest average sales price since $111,824 in February 2011.
“While we missed our year-over-year gain, we improved nicely in average price while pending sales for next month are significantly high and inventory is dropping,” said Steve Bois, CEO of RAR. “All indicators point to a continued housing recovery.”
Bois said pent-up buying demand is rising with echo boomers about to enter the market. A new housing study by Harvard University released in June (“State of the Nation’s Housing 2012”) reports that starting in 2012 and continuing over the next 20 years, those born in the late 1970s and early 1980s will drive the housing market.
“Young households have opted to rent in recent years,” said Bois, “but most still aspire to owning a home. The monthly mortgage payments for a typical home compare more favorably to rents than at any time since the early 1970s.”
A late 2011 Fannie Mae Housing Survey found that 86 percent of renters 18 to 34 believe they will ultimately own homes. Close to 70 percent of respondents felt it was a good time to buy.
Meanwhile, mortgage rates continue to hit new lows. The average monthly commitment rate on 30-year fixed-rated mortgages was 3.68 in June, according to Freddie Mac. This was down from 3.91 in April and 3.80 in May, and the lowest monthly average ever recorded.
“For the first six months of the year, buyers came out in the market excited about prices and historically low interest rates,” said Bois. “We’re excited about what the second half of the year holds.”
From the July 18-24, 2012, issue