While the housing market has seen a number of positive factors recently, including low interest rates and increased employment leading to greater demand, the U.S. Commerce Department economists found an especially large improvement this April. The team found not only an increase in sales that month, but also an even higher increase than expected, making it the second highest level of home sales since the recession.
An article in the Wall Street Journal said that new-home sales in April 2013 reached an annual rate of 454,000, a revision from the originally reported 444,000, and an even bigger increase than what was expected by MarketWatch economists, at 430,000 homes. In all, this is a 29 percent increase from April 2012.
The Journal noted the biggest factors behind this increase as pent up demand, tight inventories, low interest rates and more people moving out of relative's homes due to population growth. Regardless, it also said, "the trend shows a clear improvement from the post-recession depths below 300,000."
For financial institutions, this news could also mean an increase in mortgage or other loan applications as more families and individuals are able to get back on their feet and purchase a home. With the economy still in recovery mode, however, it is important to still be aware of the potential risks and to gather necessary information about borrowers. This will ensure that as lending grows, delinquencies do not follow. With credit application software, banks and other lenders can keep up with the growing demand for loans while remaining profitable and allow the growth in the housing market to continue.