While the Queens housing market is improving, there are still signs that indicate we are not yet experiencing a full-force recovery. Credit standards are still tight. There are thousands of homeowners in some stage of foreclosure or default, while thousands of others still owe more than their homes are worth. As long as the economy continues to strengthen, the housing market will move toward the recovery we have been waiting for. However until the recovery is fully realized, we must remain aware that if the economy weakens again, the Queens housing market could relapse.
The Federal Housing Administration announced that as a result of so many mortgage delinquencies, it might have to exhaust its reserves, which could result in the FHA needing to rely on taxpayer funds for the first time in its 78-year history. A government bailout of this magnitude could possibly weaken the economy, but the U.S. Treasury will not make a decision until next February.
Considering the current, stringent mortgage underwriting standards, it’s important to know how credit scores work; improving your credit score will increase your likelihood of obtaining financing. Record-low mortgage interest rates shouldn’t be taken for granted. Buying a Queens home now is favorable for those that want to take advantage of interest rates while they are at historic lows.
Interest rates this month continue to decline at or around 3.34%, reaching record lows. NAR President Gary Thomas states, “Even with rising home prices, we’ll continue to see favorable housing affordability conditions over the coming year, but they won’t last forever. Inflationary pressures are expected to build during the next two years. As a result, mortgage interest rates will also rise with inflation. Buyers who are currently held back by tight mortgage credit standards should work to improve their credit scores, so they’ll be able to qualify for a mortgage while conditions are still favorable.”
Home sales were down 11% this month to a seasonally adjusted rate of 536 units, a 10.7% decrease from last year. Hurricane Sandy had some impact on sales figures this month. Home sales continue to trend up and most November transactions were completed by the time the storm hit, but the growing demand with limited inventory is pressuring home prices in much of the county. We expect an impact on Queens’ home sales in the coming months from a pause and delay in storm-impacted regions.
The median home price rose in November to $389,950, compared to the previous month’s median price of $367,750. Home prices are up 18.2% from a year ago, which marks the third consecutive month and sixth month overall of year-over-year price gains, .
Pending Home Sales
In November, pending home sales fell 25.8% from November’s 774 contracts written, due in large part to Hurricane Sandy. This is the first drop in year-over-year pending home sales since June of thus year. We also expect an impact on Queens’ pending home sales in the coming months from a pause and delay in storm-impacted regions.