Home prices have been increasing since early 2012. As a result, negative equity positions have been decreasing as well as foreclosure activity. Both new and resale home inventories have decreased substantially, and some select markets are under-supplied relative to emerging demand. New home building activity has also been increasing and home builder confidence is now at levels not recorded since 2006. Interest rates remain at historic lows, and affordability levels are at new highs. Consumer sentiment has also been improving. Most housing studies suggest the housing market established a true bottom in late 2011 or early 2012. The positive movement in sales activity is likely indicative of record-low mortgage interest rates, low home prices, pent-up household formation, increases in job creation, and higher residential rental rates.
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