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...setting records should be surprising. In the early 1990s, the local resale housing market had a quarterly average of three resale homes per 1,000 people; the current quarterly average is seven resale homes per 1,000 people. The falling interest rates have facilitated this growth, allowing homeownership to grow from 66 percent in 1997 to nearly 70 percent in 2001. Also, more people have been acquiring investment housing. Thus, as long as the area grows and the homeownership environment remains positive, the market has a solid basis for a very good year, if not another record.
AFFORDABILITY
In early November, the Federal Reserve Board lowered interest rates for the first time since December 2001. However, during the year, funds have flowed from the uncertain equity market to the bond market, driving down interest rates. The average 30-year mortgage interest rate has declined from 6.7 percent in first quarter 2002 to 6.0 percent, in contrast to last year's 6.7 percent. During the quarter, interest rates have fallen from 6.2 percent in July to 5.8 percent for June.
In the resale home market, the median home price rose to $146,000, compared to the previous record of $144,000 set in second quarter 2002. Last year, the median resale home price was $138,000. For new homes, the median price increased from $155,250 in second quarter 2002 to $159,535, and was ahead of the $156,500 for year ago. The slower rise in new home median price is primarily due...
NOTE: All illustrations and photos
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