Affordability pushes some back into moving market

Pending home sales ticked upwards in August, a possible sign that low mortgage rates and falling home prices are encouraging some to pack their moving boxes.

The National Association of Realtors reported that pending home sales rose 4.3 percent in August, bringing their index up to 82.3 from a mark of 78.9 in July. Still, pending home sales were down 20.1 percent year-over-year, significantly off pace from the August 2009 reading of 103.0. But still, more families were signing contracts and moving into new homes, a possible sign that the next two months will lead to a recovery of sorts for the housing market.

"Current low consumer price inflation has helped keep mortgage interest rates very attractive this year," said NAR chief economist Lawrence Yun, though he cautioned that rising productions costs and commodity prices might lead to future inflation. "Higher inflation would mean higher mortgage interest rates. In the meantime, housing affordability is hovering near record highs."

The bottom line for many families might be that moving now would be the best way to take advantage of the market's affordability. On the other hand, a report this summer from CoreLogic predicted mortgage rates to remain low into 2011, possibly buying moving families more time to mull their decision.
 

More News