If you’ve been awake for the past few years, you’ve no doubt heard plenty of talk about the devastating recession we all endured. As you know, the housing market was one major contributor to the crisis, and you may even have been personally affected. Even as the economy has shown signs of recovery, the housing sector has continued in its historic slump.
When many Americans found themselves “under water” on their mortgages, owing more than the properties were worth and finding it difficult to sell their homes, it forced a change in the way they thought about saving for retirement and financial issues in general. Many become pessimistic and lost hope that they would ever be able to retire, because for so many of us our greatest debt is our home.
The good news is that the current situation is unlikely to last much longer. During the second quarter of this year, statistics have proven that the housing market appears to be finally rebounding. New single-family home sales increased 4.7 percent over the first quarter of 2013. That may not sound like much, but consider this fact: the sales for that quarter were 30 percent greater than the same quarter last year. In just one year, sales have shown a dramatic increase.
Of course, a skeptic might say that the increase in sales is driven by low prices. This is where we see more good news; prices are in fact rising! During the second quarter of 2013, median new home prices rose 2.3 percent, and median prices for existing homes increased by an impressive 15.4 percent over the previous quarter. Even better, these figures were up 10.8 for new homes and 12.2 percent for existing homes over the same time period one year ago.
The numbers for the construction industry look promising as well. For the second quarter of 2012, there were 20.5 percent more new homes being built than there were at the same time in 2012. These statistics point to a likely recovery of the housing market, as well as the jobs market and the overall American economy.
Analysts advise homeowners to feel cautiously optimistic. While it is never a good idea to focus too heavily on your home ownership as a foundation of your retirement plans, mortgage debt and the ability to sell your home when needed are certainly influencing factors. Not to mention, a return of a strong overall economy could positively affect your retirement in many ways. Right now, the current economic climate indicates that your retirement options are unlikely to be as limited as you feared, and as conditions continue to improve your outlook should only get better.
Source: US Dept of Housing and Urban Development, http://www.huduser.org/portal/ushmc/quarterly_commentary.html
