The current housing market is a lot like a sleepy bear, rising for the first time after spending the winter hibernating in its den.
That old bear lumbers around the forest half-awake, looking for food. He's hungry and motivated for action, but still emerging from his seasonal stupor.
It's spring, and the housing market also is awakening after a deep recessional sleep. Buyers and sellers are hungry for action.
There's lots of pent-up demand to be satisfied. But it's not cresting into a sales boom period.
In most areas, however, housing sales are up. Recovery is definitely on its way.
"Throughout most of the nation, the housing market has settled on a course of recovery," said Dorcas Helfant, president of the National Association of Realtors.
The recent increase in sales activity results primarily from four factors: general improvement in our economy; mortgage interest rates slowly starting to increase from super-low levels; pent-up demand from increasing numbers of homebuyers, and special financing incentives for first-time buyers.
When mortgage interest rates start to edge up, it tends to convince buyers that the downward trend is over and now is the time to buy before rates go higher.
An example of the special financing for first-time buyers is the mortgage plan recently announced by Fannie Mae (a secondary mortgage buyer) whereby a mortgage loan can be obtained with only a 5 percent down payment -- and 2 percent of that amount
can be lent to the buyer by a relative. For example, a $100,000 home could be purchased with a cash down payment of only $3,000 plus closing costs.
The current outlook is bright for all sectors of the housing industry, according to a National Association of Realtors report. That includes single-family and multifamily home construction, as well as existing and new-home sales.
Today's sluggish but improving real estate market will evolve into lasting expansion by summer, the association predicts.