USA Housing Market Say Strong Demand for first time home buyers

The increasing gap between homes low and top tiers in the United States is expected to restore healthy demand for first time buyers.

2015 has the promise of a middle year where complete buyer momentum in the low and mid tiers reinforce a strong housing recovery, according to the newest analysis report.

The Report says that continued national price growth in the low tier segment, once driven by investor activity, is good news for first time buyers and also hopeful is the number of potential buyers locked into underwater mortgages has been progressively decreasing. 

The latest rise in home prices continue to bring more home owners out of unhelpful equity and with more equity to play with, mid-tier home owners could move up, creating more chance and driving healthy demand in the low and mid tiers of the market.

While we are expecting price growth to modest across all tiers in 2015, the top tier’s periodical growth rate fell to 0.3% in the 4th quarter, where it had been holding steady at around 1% through the first 3 quarters of 2014,’ said Clear Capital vice president of research and analytic.

The report shows that year on year this tier knowledgeable the lowest price growth rate of 3.6% among the three national tiers. At its current pace, continued control in the top tier could push quarterly price growth into negative country in 2015. 

January data also reveal the low tier holding on to dual digit gains year on year at 10.2% and healthy quarter on quarter gains of 1.5%. The firm believes that this divide between a healthy low tier and stall top tier could kick off a domino effect. 

Stalling prices in the top tier of the market could create the insight of a good deal. This instills self-confidence in mid-tier home owners, motivating them to move up to the top tier. In turn, this opens up more opportunity for low tier home owners to move up to the mid-tier.

Create new opportunity in the low tier could entice potential first time buyers to enter the market. This domino effect could be the means for balanced demand across all sectors of the market.

The Midwest continues to lead the increase and year on year held on to double digit gains in the low tier segment at 13.6%, while the top tier fell to 3.3%. This gap between growth in the low and top tiers was also recorded on a quarterly basis, with the low tier increasing at 1.7% and comparatively flat growth in the top tier at 0.5%.

The Midwest led the nation in the all tier segment, with quarter on quarter growth at 0.9%, narrowly binding the West at 0.7%. The Midwest is the only region at present seeing price appreciation in the low and mid tiers, growing at the same time as above 1%.

The firm explained that a moderating top tier could incentive mid-tier home owners in 2015 to move up, setting up the Midwest to be the first region to realize complete buyer momentum across all segments.

We continue to observe the growing price performance gap between the top and bottom segments of the market. The rate of approval for top tier homes is stalling, which is a more direct reflection of waning fair market demand.

While this is a concerning development, there is a silver lining. The moderate upper tier may give usual buyers a moment to catch their breath, and entice move up buyers to enter this segment of the market,’ he explained.

The ripple effect of opening up stock all the way down the price spectrum could provide opportunity and incentive across all segments, including first time buyers, to enter the marketplace,’ he pointed out.

The hope is that force in the low and mid tiers help restore self-confidence in a stable housing market, and customary home buyers re-engage. The next phase of the housing recovery is needy on healthy demand from this segment,’ he concluded.