Recent economic reports indicate real estate activity picked up in the third quarter, yet overall annual economic growth is expected to remain less than 2% through the end of the year. Continued resilience in the housing market, couple with positive Job growth in September and the Federal Reserveâ€™s latest quantitative easing measures appear to have bolstered consumer confidence. Uncertainty surrounding ongoing financial and policy issues both domestically and abroad may contain to restrict sustained economic growth in 2012.
The fiscal cliff and debt ceiling debate as well as the weakened global economic environment are likely to create the strongest headwinds facing any real improvement this year. With these issues hanging in the balance, risks remain tilted to the downside despite recent improvements in the real estate market. News from the housing sector is noticeably more positive, with various indicators showing continued momentum toward a sustainable, long-term recovery. Of note are home prices which are reaching into positive territory on a year-over-year basis. Results from a recent national housing survey show consumersâ€™ home price expectations have remained positive for over a year.
Although home prices are likely to dip somewhat in the winter season following typically stronger spring and summer months, many economic hold firm with their belief that home prices hit bottom earlier this year. Combined with record-low mortgage rates, aided by the Federal Reserveâ€™s latest round of mortgage-backed security purchases, more consumers are likely to enter the housing market. Total home sales are expected to rise approximately 9% this year from last yearâ€™s depressed levels. However, the biggest impact from declining mortgage rates will be to extend the ongoing refinance boom, helping to improve household cash flows, thereby allowing homeowners to spend more, save more, or pay down their debt.
Keller Williams Realty Atlanta North